What is a Doji Candlestick?

A doji (dо̄ji) is a name for a trading session in which a security has open and close levels that are virtually equal, as represented by a candle shape on a chart. Based on this shape, technical analysts attempt to make assumptions about price behavior. Doji candlesticks can look like a cross, inverted cross, or plus sign. 1

What is a Doji in trading?

The patterns that form in the candlestick charts are signals of such market actions and reactions. Doji are used in technical analysis to help identify securities price patterns. A doji names a trading session in which a security has an open and close that are virtually equal, which resembles a candlestick on a chart.

What is a gravestone doji candle?

A gravestone doji candle is a pattern that technical stock traders use as a signal that a stock price may soon undergo a bearish reversal. This pattern forms when the open, low, and closing prices of an asset are close to each other and have a long upper shadow.

What is a Doji pattern?

A doji could be formed by prices moving lower first and then higher second. Either way, the market closes back where the day started. Chart 1 below of General Electric (GE) shows two examples of doji patterns: In a doji pattern, the market explores its options both upward and downward, but cannot commit either way.