Definition
Doji
A doji is a candlestick with a tiny or absent body, signalling indecision between buyers and sellers.
A doji forms when the open and close are almost equal, leaving a small body with wicks on one or both sides. It shows that neither bulls nor bears won the session — a pause that often precedes a reversal, especially after a strong trend. Variants include the long-legged doji, dragonfly, and gravestone.
Indian chartists watch for a doji on Nifty, Bank Nifty, or stocks at the top or bottom of a move, treating it as an early warning to tighten stops or wait for confirmation. On its own a doji is just indecision; its meaning comes from where it appears and what the next candle does.
Related terms
- HammerA hammer is a bullish reversal candlestick with a small body at the top and a long lower wick, found after a decline.
- Shooting StarA shooting star is a bearish reversal candlestick with a small body at the bottom and a long upper wick, found after a rally.
- Engulfing PatternAn engulfing pattern is a two-candle reversal where the second candle's body completely swallows the first.
- Candlestick PatternCandlestick patterns are formations of one or more candles that suggest likely shifts in market sentiment.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.