Doji
Technical Analysis
What it means
A candle where open and close are nearly equal, making a thin cross or plus shape. It signals indecision between buyers and sellers.
Example
A stock opens at $100, swings up to $102 and down to $98, then closes at $100.02. The tiny body and long wicks form a doji -- buyers and sellers fought to a draw.
Mistake beginners make
Beginners treat every doji as a reversal signal. A doji in the middle of a trend means nothing; one at a key support or resistance level is the only one worth watching.
Related terms
- Candlestick — A bar that shows the open, high, low, and close price for a period. The body is colored (g…
- Hammer — A candle with a small body near the top and a long lower wick, forming a hammer shape. It …