Doji Pattern

Doji is a single candlestick pattern which has ‘No body’, only shadows. Having no body in the candle would mean that there is no difference between the Open and the Close price. Hence, only a line is plotted in the candle instead of the body.

The line appears at the Open and Close price level.

Since the Open and Close are at the same level, there is no color defined for the Doji candle.

Practically, there is a very rare possibility that price opened exactly where it closed. There can be a slight difference between both. So, stick to the essence of the pattern and treat the negligible difference between Open and Close price as a Doji candle.

Let’s apply some flexibility to the requirement of same opening and closing prices. If they are within a few ticks of each other, it can still be viewed as a Doji candle.

In that case, even if close is few ticks above the opening price, the color of the candle becomes green. Same way, even if close is few ticks below the opening price, the color of the candle becomes red. But color of the Doji candle us unimportant, it should be ignored.

Doji pattern indicates indecision among market participants.

Click here to learn more about the Doji pattern.

This pattern can be plotted on the chart by adding it from the study menu in TradePoint & RZone. The pattern is also available in the system builder section. By combining this pattern with other patterns and indicators, you can create your own trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.

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