Technical & Chart Analysis
Doji
A candlestick whose open and close are virtually identical, producing a tiny body that signals indecision between buyers and sellers.
What Doji means
A doji forms when a period closes at or extremely close to where it opened, leaving a body so thin it appears as a horizontal line. The wicks can be short or long, and their arrangement gives the variant its name: a long-legged doji has extended shadows on both sides, a dragonfly doji has a long lower wick and almost no upper wick, and a gravestone doji is the reverse. What all versions share is the message that neither side finished the period with an advantage.
Because indecision matters most after a directional move, context determines whether a doji is meaningful. A doji at the top of an extended advance, or at a tested resistance level, hints that buying pressure has stalled and often precedes a pause or reversal. The same shape in the middle of a quiet range says almost nothing. Doji are also common on low-liquidity periods simply because little trading occurred. Most traders require the following candle to break the doji range before treating it as a signal.
Worked example
A daily EUR/USD candle opens at 1.0852, reaches 1.0898, dips to 1.0808 and closes at 1.0850. The two-pip body against a ninety-pip range is a long-legged doji: a full day of swings that resolved nothing.
Related terms
- Candlestick ChartA price chart where each period is drawn as a body spanning open to close plus wicks marking the period high and low.
- Pin BarA candle with one long wick and a small body, showing that price probed a level and was firmly rejected within the period.
- ConsolidationA phase of sideways, low-range trading in which price pauses and volatility contracts before the next directional move.
- Price ActionAn approach that reads raw price movement, candle structure and levels directly, with few or no derived indicators on the chart.
Frequently asked questions
What does Doji mean in forex trading?
A candlestick whose open and close are virtually identical, producing a tiny body that signals indecision between buyers and sellers.
How does Doji work in practice?
Because indecision matters most after a directional move, context determines whether a doji is meaningful. A doji at the top of an extended advance, or at a tested resistance level, hints that buying pressure has stalled and often precedes a pause or reversal. The same shape in the middle of a quiet range says almost nothing. Doji are also common on low-liquidity periods simply because little trading occurred. Most traders require the following candle to break the doji range before treating it as a signal.
What is an example of Doji?
A daily EUR/USD candle opens at 1.0852, reaches 1.0898, dips to 1.0808 and closes at 1.0850. The two-pip body against a ninety-pip range is a long-legged doji: a full day of swings that resolved nothing.
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