How to read a candlestick chart

Doji Type

Identification

Potential indications

Doji Star

Small wicks/shadows extending from the doji “body”, which is centered in the candlestick.

Unreliable in indicating either a continuation or reversal of the current trend on its own. Traders will often wait for the next candle to close to either confirm or deny their prediction. Like all doji, its indication is neutral without the context of surrounding candles.

Long-Legged Doji

Long wicks/shadows extending from a centered doji body.

The price moved dramatically above and below the Open price before closing at an equal or virtually equal price. Viewed on its own, a Long-legged Doji is unreliable in indicating either a continuation or reversal of the current trend.

Dragonfly Doji

A long lower wick/shadow extending from a doji body. The Open, Close and High prices are equal or virtually equal.

Resembles an uppercase “T”.

Bears were able to push the price below the Open price, followed by an equal reaction by the bulls. May be considered a reversal signal if formed at the bottom of a down-trend. Be aware that a single doji candlestick on its own cannot indicate either the end or continuation of a trend.

Tombstone Doji

A long upper wick/shadow extending from a doji body. The Open, Close and Low prices are equal or virtually equal.

Bulls were able to push the price above the Open price, followed by an equal reaction by bears. May be considered a reversal signal if formed at the top of an up-trend. Be aware that a single doji candlestick on its own cannot indicate either the end or continuation of a trend.

Four Price Doji

A horizontal line with no wick/shadow. All four prices — Open, High, Low & Close — are equal or virtually equal.

Found in low-activity markets on low time periods (eg. 1 minute (1M) candles) Often indicates a period of very low or non-existent trading activity. Confirm low or non-existent trading activity with a volume indicator.