Doji types and what they mean

The candle that ends where it started

A doji is a candle that opens and closes at nearly the same price. The body — the colored rectangle in the middle of the candle — is so thin that it looks like a horizontal line. As a working definition, when the body is roughly five percent or less of the candle's total range, you have a doji. The story is simple. During that bar, buyers and sellers fought, and neither side won the close. Whatever happened intrasession, by the time the bar finished, price returned to its opening level.

There are four shapes worth knowing. A standard doji has small wicks on both sides that look roughly similar in length. A long-legged doji has long wicks on both sides — the candle shows that price traveled significantly up and down before settling back at the open. A gravestone doji has a long upper wick with almost no lower wick, meaning price was pushed high during the bar and then rejected all the way back down. A dragonfly doji is the mirror — long lower wick, almost no upper wick — meaning price was pushed low and then bought back up to the open.

What does a doji tell you? On its own, indecision. The fact that the open and close finished at the same price means the bar resolved as a draw. Indecision can be useful information when it appears at meaningful locations. A doji at the top of an extended uptrend can be the first sign that the trend is losing fuel. A doji at a tested support level after a long decline can hint that sellers are running out of new lows to make. A doji in the middle of a chop range is mostly noise, because indecision there is already the default state.

Use the doji as a question mark, not an exclamation point. When you see one at a key location, ask whether the existing trend can survive the pause. Watch the next bar or two to see who breaks the tie. Doji clusters — two or three in a row near the same level — often signal a more reliable pause than a single doji alone, because they show repeated failures by both sides to take control.

Recap: a doji = tiny body, near-equal open and close. Four common shapes — standard, long-legged, gravestone, dragonfly. Meaning depends on location. Read them as pauses, not predictions.