Doji

A Doji is a candle where the open and close prices are essentially equal, producing a cross-shaped appearance with wicks extending above and below a tiny body. The pattern signals indecision, neither buyers nor sellers controlled the session. Variants include the Long-Legged Doji (long wicks both sides), Dragonfly Doji (long lower wick, no upper wick, bullish context), and Gravestone Doji (long upper wick, no lower wick, bearish context).

Like engulfing patterns, Doji context is everything. A Doji in the middle of a range is noise; a Doji at a key support or resistance after an extended move is a legitimate reversal warning. Traders typically don't enter on the Doji itself, they wait for confirmation from the next candle (a close beyond the Doji high or low in the suspected reversal direction). Using Doji as filters rather than entry triggers reduces false signals considerably.