What is Doji?
In short
A candle whose open and close are nearly equal — buyers and sellers in balance, a sign of indecision.
A doji is a candle whose open and close are almost equal. Its body is very thin, sometimes just a line, while its wicks can be any length. A doji says that neither buyers nor sellers won the period — the market is undecided.
How it is identified
There is no strict formula, but in practice a candle is treated as a doji when its body is smaller than roughly 5–10% of the full range: |Close − Open| ÷ (High − Low).
Types
- Standard doji — wicks on both sides.
- Long-legged doji — both wicks are long; the period saw a big swing.
- Dragonfly doji — a long lower wick and almost no upper wick.
- Gravestone doji — a long upper wick and almost no lower wick.
When it is useful
A doji doesn't point in any direction by itself. Its meaning depends on context: after a long rally near resistance, it may hint that buyers are tiring. In a sideways market, dojis are routine and mean almost nothing. A doji is often part of larger patterns such as the morning star. Don't draw conclusions until the next candle confirms a direction.
The body shows who won, the wicks show what was rejected. Marubozu: a full body with almost no wicks. Spinning top and doji: a small body, indecision. Hammer and dragonfly doji: lower prices were rejected. Shooting star and gravestone doji: higher prices were rejected.
Example
Illustrative case: a stock rises five days in a row from $68 to $75. On day six the candle opens at $75.10, closes at $75.05, with a high of $76.40 and a low of $73.90.
- Body: $75.10 − $75.05 = $0.05.
- Range: $76.40 − $73.90 = $2.50.
- Body share: 0.05 ÷ 2.50 = 2% — a doji.
Price moved more than $1 in both directions during the day but closed almost where it opened. If the next day closes below $73.90, that may confirm a move down. A close above $76.40 means the rally is continuing.
Mistakes and tips
Don't trade a doji on its own: wait to see how the next candle closes.
Dojis inside a sideways range are usually meaningless — they deserve attention only at the end of a trend or near a key level.
On very low timeframes (1–5 minutes) dojis are so common that they carry little information.
Frequently asked questions
- Should I sell when a doji appears?
- No — a doji only signals indecision. A decision needs context (trend, level, volume) and confirmation from the next candle.
- Is a doji green or red?
- The body is so small that the colour barely matters. What matters is the length of the wicks and where the doji forms.
Learn it in the Academy
This term is covered with hands-on examples and a quiz in these lessons of the interactive course.
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