What is a Doji candlestick pattern?

Popularly known as the ‘doji candle’, the doji candlestick chart pattern is one of the most unique formations in the world of trading. Learn more about this pattern and find out how you can trade when you recognise it. What is the doji candlestick chart pattern?

What does it mean if a Doji candle is in an uptrend?

If you spot a Doji in an uptrend, it means the market is temporarily in equilibrium. Once it “rested” enough, the market is likely to move higher since that’s the path of least resistance. But don’t make this mistake… Most traders spot a Doji in an uptrend and think… “The trend is about to reverse, time to go short on this doji candle!” Bad idea.

How many different doji patterns are there?

Apart from the Doji candlestick highlighted earlier, there are another four variations of the Doji pattern. While the traditional Doji star represents indecisiveness, the other variations can tell a different story, and therefore will impact the strategy and decisions traders make.

What is a dragonfly doji candle?

In a strong trend or healthy trend, a doji candle is likely to “bbounce off” the Moving Average. Thus, you’ll look to go long when the price does a pullback towards a key Moving Average and forms a Dragonfly Doji. Now, you’ve learned what the Dragonfly Doji is and how it works.