What is Doji candle ?
Doji is a Japanese word as we are studying Japanese candlestick pattern. As we said before, we are going to study this article in detail, and here we are, The word Doji in Japanese means Mistake or any blunder. Now, in this case, Doji candle means again no trend at all, No clear trend, uncertainty or you can say indecisiveness in the market.
So the indication is the same But there is a difference in size between Doji and the spinning top. What is it? Let’s study Doji-candle types, you will understand it.
Types of Doji Candle
As you can see in picture there are four different types of Doji-candle
As you can see in the picture, there are four different types of Doji candlestick
Normal /neutral Doji
In this case, the overall candle size is small and the shadow on both sides is also equal with a dash between the middle and the body. So the overall movement in stock has been less.
Long legged Doji
It’s the same as a normal Doji candle with only one difference, as this candle is big in size ..As it has more shadow. So, Basically, the stock had a big movement today but ended up where it opened.
This candle normally appears in the BULLISH trend. This candle Implies stock opened and touched high but again came down near the OPEN price. So Bulls took stock UP, but stock managed to come down later thanks to bears. So it’s a BULLISH trend reversal candle.
This candle normally appears in the BEARISH trend. This candle Implies stock opened and touched low but again bounced back and closed near its OPEN price. So bears put stock down, but stock managed to go high with the help of Bulls. So it’s a bearish trend reversal candle.
Examples of Doji candlestick
Let’s see some of examples of appearance of Doji candlestick on chart.
Gravestone Doji candlestick formed in Reliance and check the immediate candle after that. It gave an indication that Bulls are getting weak, and after the gravestone Doji candlestick, a bearish MARUBOZU candle formed. Now let’s see the next example.
Again, the Gravestone Doji formed and then a Bullish trend reversal and bearish candle formed…
In the above picture you can see two Continuous dragonfly Doji and then a Gap up opening in the next candle in the above picture.
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