What is a Doji candle?

Doji candle is a candlestick pattern that indicates market neutrality. Market neutrality means that buyers and sellers will cancel one another out, resulting in no net price movements for a given trading period. When this happens, the Doji candlestick pattern emerges on the trading chart.

What is a Doji Candlestick trading strategy?

A popular Doji candlestick trading strategy involves looking for Dojis to appear near levels of support or resistance. The below chart highlights the Dragonfly Doji appearing near trendline support.

Are doji candlesticks a sign of a reversal?

Doji candlesticks are often found at the bottom and top of trends where they may be considered a sign of possible reversal of price direction, but the Doji pattern can occur at any place in the price trend and can also serve as a continuation pattern. Of course, there are different types of Doji pattern; let’s take a look at them.

What makes a Doji candlestick a spinning top?

For a candlestick to be classified as Doji, its real body shouldn’t be more than 5% of the size of the entire candlestick’s range. When the real body is more than 5%, it becomes a spinning top. A spinning top also implies indecision in the market. There are many types of Doji candlestick.