Doji – Candlestick

Doji are important candlesticks that provide information on their own and also feature in a number of important patterns. Doji form when a market open and close are basically equal. Alone, Doji are neutral patterns. Any bullish or bearish bias is based on previous price action and future confirmation.

A Doji can signal weakening buying pressure only when it appears after a long green candlestick or an upward trend pattern. Conversely, a Doji can signal weakening selling pressure when it appears after a long red bar or a downward trend pattern. Either way, Doji show that buying and selling pressure is evenly matched, and might indicate a possible trend reversal. This pattern alone is not enough to give the trader a sound reversal signal. One must always look for more confirmation when these Doji appear.

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