What is a Doji candlestick?
Doji Candlestick, or Doji, is a type of candlestick pattern that arises from the uncertainty of buying and selling pressure within that candlestick. The opening price cannot continue and ends up closing at the same point as the opening price, resulting in the closing price of the Doji candlestick being at the same or very close to the opening price. This Doji candlestick pattern is characterized by having only the wick and no body.
Types of Doji Candlestick Patterns
A Doji candlestick can be found at any market phase. If it appears during any phase, we can predict that the market direction is currently uncertain. It mainly comes in three forms.
Doji
It is a candlestick with little or no wax in the middle of the wick. The appearance of this candlestick resembles a plus sign, indicating that the price has moved up and down, but the market could not close the price, so it returned to close at the same point as the opening.
If a Doji candlestick appears in the market, it indicates that The market is still hesitant. Traders should wait for the next candlestick that forms. There is a price movement that can engulf the Doji candle first, then open an order based on that candle.
Gravestone Doji
Or if we take the literal meaning, a gravestone is a candlestick with little or no wax at the bottom of the wick. The characteristic of this candlestick indicates that the price opened low, then rose, but could not close and fell back to close at the same point as the opening.
If a candlestick forms Gravestone Doji in an uptrend indicates that the market may reverse. Traders should wait for the next candle to form. There is a price movement that can engulf the Gravestone Doji candle before opening an order based on that candle.
Dragonfly Doji
Or the literal meaning is that a dragonfly is a candlestick with little or no wax at the top of the wick. The characteristic of this candlestick indicates that it opened at a high price, then the price dropped, but it couldn’t close and ran back up to close at the same point as the opening.
If a Dragonfly Doji candlestick appears in the market, it indicates that the market may also reverse. Traders should wait for the next candlestick to form. There is a price action that can engulf the Dragonfly Doji candle first, and then you can open an order based on that candle.
