Thursday, June 18

Technical Analysis Doji Candlestick

Online Stock Trades - Candlestick Charts - Doji

Using Technical Analysis of Stock Market Charts and Japanese Candlesticks in Online Stock Trading

In technical analysis using Japanese Candlestick charts the Doji candlestick is a single candlestick reversal pattern. It can be either bullish or bearish. It is bullish if it comes at the bottom of a down trend in ther market. It is bearish if it comes at top of anuptrend in the market. It has no real body because the stock price closes at the same price as it opened. This does not need to be eact but very close. There needs to be a trend before the doji for it to be a valid reversal signal. There also needs to be confirmation of the reversal by the price trading below or above the doji as the case may be. If trend prior to the doji candlestick was sideways then the doji is not meaningful and should be ignored.

The doji candlestick means that neither bulls nor bears are in charge, it therefore represents indecision, which is in itself a powerful market signal that a change may be imminent.

There are three types of doji - the normal doji, the gravestone doji and the dragonfly doji. In all three types the opening price is very close to closing price. In the normal doji the price moves up then down then back up and settles in the middle at the opening price. In the gravestone doji, the price moves up then down to close at the low. The gravestone doji is considered more bearish. In the dragonfly doji the price moves down from the open then moves back up and closes at the high - this is considered more bullish.

Inverted Hammer Candlestick
Piercing Pattern
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