Doji

In trading, Doji is candlestick pattern used in technical analysis that occurs when a security's open and close prices are the same, or very close to each other. It results in a candlestick with a small body and long wicks (or shadows) on either side. The pattern looks like a cross or a plus sign.

The significance of a Doji pattern is in its indication of indecision in the market. This pattern suggests that neither buyers nor sellers were able to gain control, leading to a balance between supply and demand. This can be a signal that a potential reversal or consolidation might be approaching.

There are different types of Doji patterns, including:

1. Standard: the open and close prices are very close, with long upper and lower shadows;

1. Long-Legged: features long upper and lower shadows, indicating high volatility;
2. Gravestone: the open, low, and close prices are all at the same level, with a long upper shadow and little or no lower shadow, suggesting potential bearish reversal.
3. Dragonfly: the open and close are at the same level, with a long lower shadow and little or no upper shadow, suggesting potential bullish reversal.

The horizontal line of the Doji shows that the open and close occurred at the same level. The vertical line of the Doji represents the total trading range of the timeframe.

Traders often use Doji patterns in conjunction with other technical indicators and patterns to confirm potential trends or reversals.