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Candlestick patterns

The doji:a candle where neither side won.

A doji is a candlestick whose open and close are at or very near the same price, leaving almost no body, with wicks on one or both sides. It shows a session in which neither buyers nor sellers finished in control. On its own it signals indecision; traders read it in context, such as at a key level.

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What a doji shows

Candlestick charts, which originated in Japan, draw each period's open, high, low and close. A doji is the period where the open and close nearly coincide: price moved, but ended where it began.

There is no fixed rule for how small the body must be. A common working definition is a body that is a small fraction of the candle's full range; each trader has to pick a threshold and apply it consistently.

Types of doji

The types are named by where the open and close sit within the range.

Common doji types
TypeShapeUsual reading
Standard dojiSmall body near the middle, short wicksIndecision
Long-legged dojiSmall body, long wicks on both sidesWide disagreement within the session
Dragonfly dojiOpen and close at the high, long lower wickSellers pushed down and were fully reversed
Gravestone dojiOpen and close at the low, long upper wickBuyers pushed up and were fully reversed
Four-price dojiOpen, high, low and close all equalNo movement at all - usually a thin or halted market

Why context decides

A doji in the middle of a quiet range is ordinary and carries almost no information. The same candle after a long, fast trend, or at a well-watched support or resistance level, is read as a sign the move may be pausing. Most traders wait for the next candle to confirm a direction rather than trading the doji itself.

Search interest in the biggest doji ever usually refers to unusually wide long-legged dojis on major indices or currencies. Size alone is not significant; a very wide doji says a session saw large moves both ways and closed unchanged.

Step by step

How to identify it

Decide on a body threshold first, then judge the context.

  1. Set a rule for a doji body, such as a body no more than a small, fixed fraction of the range.
  2. Classify the type by where the open and close sit in the range.
  3. Check what came before: a strong trend, a range, or a key level.
  4. Wait for the next candle to show which way price resolves before acting on it.

Worked example

The concept,walked through

A dragonfly doji at support, described

An illustrative sequence in words, with round numbers standing in for price. It is not taken from any real instrument or date.

  1. 1. TrendPrice has fallen for four sessions into a support zone near 100.
  2. 2. DojiThe next session opens at 101, falls to 98.5, and closes at 101 - a dragonfly doji.
  3. 3. ConfirmationThe following session closes at 102.5, above the doji's high.

The doji showed the decline was rejected for one session; the next candle showed buyers following through, this time. The same doji could just as easily have been followed by a new low.

Common mistakes

Where tradersgo wrong

Trading every doji

Dojis are common. Without context, they are noise.

Reading a gravestone as always bearish

The type suggests where pressure was rejected; the trend and the next candle still decide.

Using a different body threshold each time

An inconsistent definition makes any testing of the pattern meaningless.

Limitations

What it cannottell you

No chart concept predicts price. These are the limits worth keeping in view.

  • Candle shapes depend on the chart's timeframe and session boundaries; the same price action can produce a doji on one chart and not another.
  • There is no reliable evidence that doji candles predict direction on their own.

In an evaluation

Using it on asimulated account

On a $100,000 simulated account the daily loss limit is $3,000 on Instant or $5,000 on 1 Step and 2 Step. Pattern stops are often wide, so size from the stop distance first - risking something like $500 a trade - rather than from how clean the pattern looks.

Trading rule

What is the daily loss limit?

The ceiling on a day's losses - 3% on Instant and 5% on 1 Step and 2 Step.

Trading rule

When can I trade?

Session boundaries on your account shape how candles are drawn.

Trading rule

What is maximum drawdown?

The overall floor beneath the account.

Questions

Asked aboutthis concept

That the session opened and closed at nearly the same price: neither buyers nor sellers finished in control. It signals indecision, and its meaning depends on where it appears.

Neither on its own. A doji after a strong move is read as a possible pause, and the next candle usually decides the direction traders act on.

Keep learning

Relatedlessons

Chart and candlestick patterns

Pin Bar Candle: Bullish and Bearish

The long-wicked candle that shows price reaching a level and being rejected - bullish and bearish forms, where they matter, and why most are noise.

Chart and candlestick patterns

Inverse Head and Shoulders Pattern

Three troughs with the lowest in the middle, a neckline across the rallies between them, and a break above it - the pattern and its limits.

Chart and candlestick patterns

Double Top Pattern (the M Pattern)

Two failed attempts at the same high - how the M pattern is drawn, what confirms it, the double bottom mirror, and its limits.

Sources

What this pagerelied on

  1. Doji - Wikipedia. Retrieved 22 September 2026. The definition of a doji and the names of its common variants.
  2. Candlestick pattern - Wikipedia. Retrieved 22 September 2026. Candlestick construction, the pattern names, and the Japanese origin of the charting method.

Educational content only, not investment advice or a recommendation to trade. Chart concepts describe what price has done; none of them predicts what it will do, and trading any strategy can lose money. Get Funded Now accounts are simulated and trade virtual funds. Last reviewed 22 September 2026.

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