2. The Doji

Different form of the ‘Doji’: 
Doji candlesticks have nearly the same open and closing price or at least have a extremely short body.

A Doji has a small body that is been shown by a thin line.

Doji candlesticks are a signal the market doesn’t know what to do. A stare-down between the Bulls and the Bears. Prices tend to move above or underneath the opening price but will close at or relatively close at the opening level. Nor the Bulls or the Bears have been able to score, end result a draw.

There are four special Doji candlesticks.

The length of the upper and lower shadows can vary and result in a candlestick that looks like a cross or reversed cross or a (+) symbol.

The word Doji is used both the singular and plural.

When a Doji appears on your chart, make sure you pay good attention to the historical or past candlesticks.

The Doji candlestick patterns is one of the most important ones to recognize. It’s a clear sign of a broken trend. The clarify a status-quo in the market.

When a Doji occurs after a long uptrend, it is a warning signal for traders that the trend is close to its high or maybe has peaked already.

However, occurred after a long downwards trend. It means prices have been forced to stay down. This could have multiple reasons (probably fundamental).

Long-legged Doji:
This Doji candlestick pattern has a long upper and lower shadow of almost the same length. Important to compare the candle close with the center point. Closing point lower than center point shows us weakness.

A long-legged Doji show us that the market moves above and under the opening price level. However, the end result or closing result doesn’t differ much from the opening level.

Dragonfly Doji:

This particular Doji pattern occurs when the open, high and close are somewhat even and the low is responsible for the long, lower shadow.

The Dragonfly Doji show is that sellers have tried to move down the price during the session but buyers managed to lift the price up towards the opening level. It looks like the letter (T) with a long, low shadow and now shadow above the opening level. It’s important to understand the Dragonfly Doji pattern.

Gravestone Doji: 
This Doji is the opposite of the Dragonfly Doji. It looks like a reversed (T). The Graveston Doji occurs when the open, low and close are the same. The high is responsible for the upper shadow. Bulls have tried to score points during the day but the bears came back at the end to end up with a 5-5 draw.

Four Price Doji:
Four price Doji is identified whenever the length of the candles body is equal or relatively short and has no shadows nor up or down (when there are shadows they are really short).

A Four Price Doji is pretty rare. However, it shows us that neither the Bulls or the Bears knows what to do to win this match. The market is completely insecure and uncertain which direction to move to. A certain Doji could mean a trend reverse. If you spot them it will most likely be on the lower time frames.

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