Candlestick chart: Doji Introduction

Doji is formed by Open and Close trading price virtually equal.
Upper and lower shadows length can be differ depending the buying and selling activities. This will result in candlestick forming cross, inverted cross or plus sign. If interpreted as only Doji pattern, it carries neutral pattern. However, by looking at the preceding price action future confirmation, doji may carries bullish or bearish bias information.

In ideal case, the open and close of trading should be equal. Doji suggest a sense of indecision between buyers and sellers. Presense of Upper and Lower shadow indicates price move above and below the opening level during trading session, but closes at or near opening level., resulting in standoff. This means that, neither buyer or seller were able to gain control, which means it could be a developing turning point.

Ideally, but not necessarily, the open and close should be equal. While a doji with an equal open and close would be considered more robust, it is more important to capture the essence of the candlestick. Doji convey a sense of indecision or tug-of-war between buyers and sellers. Prices move above and below the opening level during the session, but close at or near the opening level. The result is a standoff. Neither bulls nor bears were able to gain control and a turning point could be developing.

To determine robustness, it is suggested that comparison with previous candlestick body is necessary. A doji should have a small body that looks like a thin line in comparison to previous candlestick. A doji that forms among other candlesticks with small real bodies, would be considered insignificant. Conversely, a doji that forms among long real bodies candlesticks is considered significant.