Short answer
What is a doji candle?
A doji is a candle whose open and close are at almost the same price, so its body is a thin line between two wicks. It shows indecision: buyers and sellers both moved price, but neither won by the close. A doji is not a signal on its own; it matters when it forms at a demand or supply zone and the next candle confirms a direction.
Key takeaways
- A doji opens and closes at almost the same price; its body is a tiny fraction of its high-to-low range.
- The four common types are the standard, long-legged, dragonfly and gravestone doji, named by where the tiny body sits.
- A doji shows indecision, not direction. The candle after it decides whether buyers or sellers took over.
- By the 50% rule every doji is a base candle, so at a zone it is part of the base and the next strong candle is the leg out.
- After a long rise or fall a doji can warn that the move is tiring, especially at a fresh opposing zone.
- Trade a doji only with confirmation, and put the stop beyond the doji's wick or the zone's distal line.
What is a doji candle?
A doji forms when a stock opens, moves up and down during the period, and closes almost exactly where it opened. Traders usually treat a candle as a doji when the body is no more than about 5–10% of the high-to-low range. The colour hardly matters, because the difference between open and close is so small.
What are the types of doji?
Standard doji
Long-legged doji
Dragonfly doji
Gravestone doji
Every doji opens and closes at almost the same price. The position of that tiny body and the length of the wicks give each type its name.
| Type | Shape | What it suggests |
|---|---|---|
| Standard doji | Small wicks above and below a tiny body | A pause; neither side in control |
| Long-legged doji | Long wicks on both sides | A wide fight that ended level; strong indecision |
| Dragonfly doji | Body at the high, long lower wick, little or no upper wick | Sellers pushed price down and buyers brought it all the way back |
| Gravestone doji | Body at the low, long upper wick, little or no lower wick | Buyers pushed price up and sellers brought it all the way back |
| Four-price doji | Open, high, low and close all equal | Almost no trading, often in illiquid stocks or circuit-locked days |
A dragonfly doji after a fall looks like a hammer with no body and leans bullish; a gravestone doji after a rise looks like a shooting star with no body and leans bearish. See the hammer and shooting star guides for those cousins.
What does a doji mean in a trend?
A doji means the side that had been winning failed to win this period. After a strong rally into a fresh supply zone, that can be an early sign of exhaustion. After a sharp fall into a fresh demand zone, it can be the first sign that buyers are absorbing the selling. Inside a sideways range, a doji is ordinary and says very little.
- After a fall, at demand: watch for a green candle that closes above the doji's high.
- After a rise, at supply: watch for a red candle that closes below the doji's low.
- In the middle of a range: usually no trade; doji are common there.
Is a doji a base candle?
Yes. By the 50% rule, a candle whose wicks make up more than half its range is a base candle, and a doji's wicks make up nearly all of it. When one or more doji sit between a strong red candle and a strong green candle, they form the base of a Drop-Base-Rally demand zone, as in the chart above. The zone is marked from the highest body in the base to its lowest wick.
How do you trade a doji?
- Check the location: the doji should sit at a fresh demand zone after a fall, or a fresh supply zone after a rise.
- Wait for the doji candle to close, then wait for the next candle.
- Bullish case: enter only after a candle closes above the doji's high.
- Place the stop loss below the doji's low or the zone's distal line, whichever is lower.
- Check that a 1:2 target fits before the next opposing zone, and size the trade from the stop distance.
What are common mistakes with doji candles?
- Reading a doji as a reversal by itself: it only shows indecision.
- Ignoring location: doji in a range are everywhere and mean little.
- Trading before the close: a mid-session doji can close as a long red or green candle.
- Stops inside the wick: the long wicks are exactly where price already travelled.
Frequently asked questions
Is a doji bullish or bearish?
Neither on its own. A doji shows indecision. After a fall into a demand zone it can lean bullish, and after a rise into a supply zone it can lean bearish, but the candle that follows decides. A dragonfly doji leans bullish and a gravestone doji leans bearish because of where their bodies sit.
How small must the body be for a doji?
There is no single official cut-off, but most traders use a body of no more than about 5–10% of the candle's high-to-low range. For a candle that trades between ₹488 and ₹512, a body of ₹1 or ₹2 qualifies; a body of ₹6 is better described as a spinning top.
What is the difference between a doji and a spinning top?
Both are base candles with small bodies and wicks on both sides. A doji's body is almost zero, so open and close are nearly equal, while a spinning top has a small but visible body. Both show indecision; the doji shows it more strongly.
What is a dragonfly doji?
A dragonfly doji opens, closes and makes its high at about the same price, with a long lower wick and little or no upper wick. Sellers pushed price down during the period and buyers brought it all the way back. After a fall, at a demand zone, it leans bullish once the next candle confirms.
What is a gravestone doji?
A gravestone doji opens, closes and makes its low at about the same price, with a long upper wick. Buyers pushed price up and sellers brought it all the way back down. After a rise, at a supply zone, it leans bearish once the next candle closes lower.
Put this into practice
Work out the numbers before the market moves, then let an alert bring you back to your own plan.
Educational content only. Nothing here is investment advice or a recommendation to buy or sell any security. Chart diagrams use illustrative prices, not market data. Trading involves risk of loss; verify prices independently and apply your own risk process.