A doji is a candle where the open and close are almost the same price, so the body shrinks to a thin line and the candle looks like a cross. It tells you buyers and sellers fought to a draw during that period. On its own it predicts nothing. It becomes useful after a stretched trend or at support or resistance, once the next candle confirms a direction.
- Signal
- Indecision
- Candles
- 1
- Look for it
- After a strong move
- In Alphacent
- Free library
How to spot a true doji
Look at the body first. On a doji the open and close are so close together that the body is a thin horizontal line. The wicks above and below can be any length, which is why doji come in several shapes, but together they form a cross or plus sign.
Real charts rarely print an open and close to the exact cent, so traders allow some tolerance. A common rule of thumb: if the body is no more than about 5 to 10% of the candle's full high to low range, call it a doji. Anything visibly thicker is a spinning top or just a small candle.
Judge it against its neighbors too. A doji with a tiny range on a quiet day means less than one that follows several wide candles, because the sudden stall is what carries the information. Alphacent's free Build a Candle tool lets you set the open, high, low and close yourself, which is a quick way to learn how thin a body has to get before it counts.
What the tug-of-war tells you
Each wick is a failed push. The upper wick marks how far buyers took price before they lost it. The lower wick marks how far sellers took it before buyers pulled it back. By the close, both sides had given up whatever ground they won, and price finished almost where it started.
That is indecision, and only indecision. A doji does not say the trend is over. It says the side that had been winning did not win this candle. After ten green days on Bitcoin, that is worth noticing, because buyers who were in control suddenly weren't. Whether sellers take over or buyers regroup and push on gets decided by the candles that follow.
Standard, long-legged, dragonfly and gravestone
- Standard doji. Short wicks of roughly equal length on both sides. A small, balanced pause.
- Long-legged doji. Long wicks both ways. Price swung hard up and down and still closed flat, so the indecision is louder. These often show up around news or at the end of a stretched move.
- Dragonfly doji. Open, close and high sit together at the top, with a long lower wick and little or no upper wick. Sellers drove price down and buyers took all of it back. At the bottom of a decline it leans bullish. After a rally it reads more like a warning, much like a hanging man.
- Gravestone doji. The mirror image: open, close and low at the bottom, long upper wick. Buyers pushed up and were rejected completely. After a rally it leans bearish.
Dragonfly and gravestone lean in a direction. They still need the next candle to agree.
The rare four-price doji, a flat dash where all four prices match, usually just means almost nothing traded. Ignore it.
Context decides whether it matters
A doji deserves a second look when it follows an extended trend that has carried price a long way, or when it forms at a level that has already been tested, such as a ceiling that turned price back twice (see support and resistance).
It is mostly noise in a sideways range, where small indecisive candles appear constantly and say nothing new. It tells you little in isolation, with no trend and no level for it to interrupt. And strong momentum tends to run straight over it: one pause, then another wide candle in the same direction.
The next candle settles it. After an uptrend, a close below the doji's low says sellers won the following round. A close above its high says buyers are back and the trend may carry on. Waiting for that close costs you a little price and filters out plenty of doji that lead nowhere.
A hypothetical doji trade on a $2,000 paper account
A made-up example with made-up prices, to show the arithmetic, not a trade idea. Gold has rallied for eight sessions on the daily chart and runs into a resistance level near $4,050 that has capped it twice. Day nine prints a long-legged doji: high $4,048, low $4,012, open and close both near $4,030.
You do nothing on day nine. Day ten closes at $4,000, below the doji's low. That is your confirmation, and you go short at $4,000.
- Stop: just above the doji's high, at $4,050. If buyers clear that, the idea is wrong.
- Risk per ounce: $4,050 minus $4,000 = $50.
- Risk budget: 1% of $2,000 = $20.
- Position size: $20 divided by $50 = 0.4 oz, worth $1,600 at entry.
- Target: $3,900, twice the stop distance. If price gets there, 0.4 oz times $100 = a $40 gain.
If the stop is hit, you lose 0.4 oz times $50 = $20, or 1% of the account, before any slippage. The doji never gave the entry; the next candle did. What the doji gave you was the stop.
Doji, spinning top and the other lookalikes
The spinning top is the closest relative. Both have wicks on each side and both signal indecision. The difference is the body: a spinning top has a small but clearly visible body, often up to about a third of its range, while a doji's body is little more than a line. Think of the doji as the purer version of the same message.
A dragonfly doji gets mixed up with the hammer. Both have a long lower wick, but the hammer has a small real body near the top. A gravestone doji is basically a shooting star with the body squeezed flat. Either way, what changes the odds is where the candle forms and what the next candle does.
A doji also often sits in the middle of a morning star, where a strong third candle supplies the confirmation a lone doji can't.
Mistakes that turn a doji into a bad trade
- Calling every doji a reversal. Most of them reverse nothing.
- Skipping the context check. A doji mid-range after three quiet candles is not the same as one at resistance after a long rally.
- Reading the color. A doji that closed a cent above its open is not bullish. On a body that thin, color carries no information.
- Putting the stop inside the doji's range, where ordinary back-and-forth will hit it.
A useful drill: open gold on the daily chart in the Alphacent simulator and, over a few weeks, note every doji you see. Mark which ones formed at the edge of a range and which ones formed in the middle, then check what the next three candles did. Free trades there are a fixed $1,000, and you close them by hand; choosing a size like the 0.4 oz above, or setting a stop-loss order, is Pro.
Worked examples on this page use a hypothetical paper account and are for learning only, not advice. In Alphacent, free trades use a fixed $1,000 size; choosing your size, stop-loss and take-profit orders, and leverage are Pro features.
Questions people ask
What timeframe is best for spotting doji candles?
Daily and weekly charts give the most meaningful doji, because a full day or week of trading ended in a stalemate. On 1-minute and 5-minute charts doji appear constantly and most are noise. If you trade shorter timeframes, check whether the higher timeframe shows a level or a stretched trend before you pay attention to one.
What is a doji star?
A doji star is a doji whose body sits apart from the previous candle's body, usually after a gap in the trend's direction. It is the middle candle in morning and evening doji star patterns. Markets that trade around the clock, like crypto, rarely gap, so traders there often accept a doji without the gap.
How reliable is the doji candlestick?
On its own, not very. There is no fixed success rate, and results vary with the market, the timeframe and what came before the candle. A doji becomes more useful when it forms at a tested level after a long move and the next candle confirms a direction. Logging your own examples and what followed is the most honest way to judge it.