Understanding the Doji Candlestick in Trading
Candlestick charts are widely used in technical analysis to visualise price movements over a chosen time period. Among the many candlestick patterns, the Doji is one of the most recognisable and frequently discussed. While it does not guarantee any particular outcome, the Doji can offer insight into market indecision and potential shifts in sentiment. A Doji is a candlestick where the open and close are at, or very near, the same price, highlighting market indecision within that period. Its interpretation depends on context, such as trend, nearby support/resistance, and volume; on its own, it does not predict direction. What Is a Doji? A Doji forms when the opening and closing prices of an asset are at or very close to the same level during a specific time frame. This results in a candlestick where the body appears very small or as a thin horizontal line, with upper and/or lower wicks extending above and below. The appearance of a Doji indicates that neither buyers nor sellers ha...