Doji Candlestick Pattern

The opening and closing prices of the commodity are equal in this pattern.

This pattern consists of a single candle.

The Doji candlestick pattern usually looks like a cross, inverted cross, or plus sign.

When the buyers and sellers fail to decide on the commodity market, it gives rise to the Doji pattern.

Classification Of Doji Pattern

The candlestick pattern can be classified into four types.

1. Neutral Doji

2. Long-Legged Doji

3. Gravestone Doji

4. Dragonfly Doji

1. Neutral Doji

This is a small candlestick pattern.

When the “buying and selling is at equilibrium”, this pattern occurs.

In the middle of the day’s high and low, the commodity opens and closes.

The future direction of the trend is regulated by the prior trend and the Doji pattern.

2. Long-Legged Doji

As the name suggests this is a long candlestick pattern.

When the “supply and demand” factors are at equilibrium, this pattern occurs.

In the middle of the day’s high and low, the commodity opens and closes.

The trend’s future direction is regulated by the prior trend and Doji pattern.

3. Gravestone Doji

This pattern gives rise at the bottom of a downtrend when supply and demand factors are at equilibrium.

At the day’s low, the commodity opens and closes.

The future direction of the trend is regulated by prior trends and the Doji pattern.

4. Dragonfly Doji

This pattern gives rise at the peak of an uptrend when the supply and demand factors are at equilibrium

At the day’s high, the commodity opens and closes.

Inference From Doji Pattern

Doji patterns are helpful to identify trends.

When it gives rise at the support level, it can be treated as an “entry point.”

When it gives rise at the resistance level, it can be treated as an “exit point.”

To ensure that our trading strategy is effective, it’s always recommended to mix and match the patterns and indicators.

Use of Candlestick Pattern

Candlestick patterns are the most versatile of indicators to intraday and swing traders as they are the best soldiers for cautioning reversals, flagging off entry points, and defining cut losses, all in one gambit.

Many times just a single candle eg. a Doji candlestick pattern or a series of sticks eg. Three black crows, can equally indicate effective signals to give some of the Best candlestick patterns that optimize profits in each of their different strategies. To the trained eye, these eye-catching bars and sticks start making trading meaning and soon catching potential in each of their appearances, becomes a good probability for profit.

How to Read Candlestick Chart Patterns for Intraday Trading?

Intraday Trading, more than in any other kind of timeframe, needs technical tools like the Candlestick pattern to catch a trend (whether continuation or pullbacks) at the earliest opportunity. The sheer number of true, trade signals that some of the best candlestick patterns indicate, give a lot of chances to enter trades for the intraday trader. Be it the ‘body’ or the ‘shadow’, every component of what constitutes a candlestick is a pointer to what the sentiment is currently flowing through the veins of the market participants. For example, a Doji candlestick pattern could go either way in intraday trades, depending on the preceding candles, which could show a bullish or bearish transition.

How to Trade the Doji Candlestick?

A Doji candlestick pattern stands for the indecisive nature of the market participants. This is apparent by the fact that the Opening and Closing prices for the period are the same or close to each other in the candlestick pattern. Hence to interpret this type of candle, the trader must look at the preceding series of candles and look for further signs for a forthcoming change in trend. Thus, a series of upward preceding candles when followed by a Doji implies a pause in the bullish ongoing trend and impending transitional pullback and vice versa.