Doji
A doji is a candlestick where the open and close prices are nearly identical, creating a cross or plus sign shape. The wicks can vary in length, but the body is minimal.
Understanding the Concept
Dojis signal indecision. Neither buyers nor sellers won the session. On their own, dojis mean little, but at key levels they're warning signs. A doji at resistance after an uptrend? Bulls are losing steam. A doji at support after a downtrend? Bears might be exhausted. The next candle confirms the direction. There are variations: gravestone doji (long upper wick) is bearish, dragonfly doji (long lower wick) is bullish. Don't overtrade dojis—wait for confirmation.
Real-World Example
Bitcoin rallies to $50,000 and forms a doji—opened at $49,800, closed at $49,850 with wicks to $50,500 and $49,200. Neither side won. Next day's big red candle confirms the reversal.
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