A doji forms when a candle's open and close prices are nearly identical, leaving a tiny body with wicks extending above and/or below. It shows that buyers and sellers fought to a draw over the session despite price moving in both directions — a pause in conviction that often appears at turning points.
Why it matters
- —Appearing after a strong, sustained trend, a doji is one of the more reliable early warnings that momentum is stalling.
- —A doji in the middle of a sideways range carries far less weight — the preceding trend determines how seriously to take it.
- —It is a warning sign, not a trade signal on its own — wait for the next candle or a break of a nearby level to confirm any reversal.
How to read it
| After an uptrend | Possible bearish reversal warning |
| After a downtrend | Possible bullish reversal warning |
| Inside a sideways range | Low-conviction noise — mostly ignorable |