Candlestick Doji in Trading: A Complete Guide from Confusion to Application

Why the свеча доджи makes traders so conflicted

Everyone who does technical analysis knows that candlestick charts are the most intuitive way to display market conditions. But when you’re staring at the chart and suddenly see a strange candle—opening and closing prices almost the same, with long upper and lower shadows—this is a свеча доджи appearing. Many beginners get confused when they see it: is this a signal to buy or to sell?

In fact, the appearance of a свеча доджи indicates a problem: during this time period, the forces of buyers and sellers have reached a certain balance. Buyers want to push prices higher, sellers are desperately pushing down, and neither side wins. This results in a candle that looks very “weird.”

Where does the name свеча доджи come from

This name comes from Japan, meaning “error” or “deviation.” Why is it called that? Because under normal circumstances, a candle with opening and closing prices coinciding is quite rare. The свеча доджи represents market participants’ uncertainty—no one can be sure which way the market will go next.

The 5 types of свеча доджи you need to know

1. Standard доджи

This is the most common, with upper and lower shadows of nearly equal length, and a very small real body in the middle. It appears when bullish and bearish forces are perfectly balanced. The problem is, it looks very “neutral” and can be misread as a trend continuation rather than a reversal signal.

2. Long-legged доджи

Both shadows are particularly long, indicating that on that day, bulls and bears fought fiercely for control, but no winner was decided. If the close is below the midpoint, it leans bearish; if above, it leans bullish. If it appears near resistance levels, the bearish signal is stronger.

3. Dragonfly доджи

The lower shadow is very long, and the upper shadow is almost nonexistent. The open, close, and the highest price of the day are on the same level, resembling a “T” shape. When this pattern appears at the bottom of a downtrend, it usually signals a buying opportunity.

4. Gravestone доджи

The opposite of the dragonfly—long upper shadow, almost no lower shadow. Open and close are at the lowest point, forming an inverted “T.” This indicates that bulls tried to push prices higher but ultimately failed to sustain the upward momentum. When it appears in an uptrend, it often signals a reversal.

5. Four-price доджи

The rarest type. Only appears during extremely low trading volume or small timeframes. The four key prices—open, close, high, and low—all are the same, forming a horizontal line. This indicates that the market was basically static during that period.

Additional phenomenon: Double доджи

A single свеча доджи can only express hesitation, but two consecutive доджи are much more powerful. Such combinations often trigger subsequent strong breakouts.

Practical risks in trading

Relying solely on свеча доджи for trading decisions is very risky. Often, the market just enters a period of hesitation for the day, and the previous trend continues. Making trades based on a single signal is essentially gambling.

The information provided by свеча доджи is limited and can sometimes be easily ignored. More importantly, it only indicates a state, not enough to build a complete trading logic.

Can you trust свеча доджи?

The key is—don’t trust it alone. The purpose of technical analysis is to warn traders based on facts and data, not luck.

свеча доджи can serve as an “early warning”—it often appears in the early stages of a reversal and is easy to identify. But before acting, you must find confirmation from other indicators. Maybe an abnormal volume, or coordination with other technical patterns.

Treat свеча доджи as part of your radar, not the whole system. Only then can you use it effectively.

Quick Q&A

Is свеча доджи a good signal or a bad signal?
Neither. It simply indicates that the market is in a hesitation phase. Appearing during a downtrend may suggest a bottom is near; during an uptrend, it may mean the rally is about to pause.

What should I do after свеча доджи appears?
Look at the overall market environment. Its appearance in a downtrend might be a buying point, but only if confirmed by other indicators. Never decide solely based on it.

What’s the difference between доджи and a hammer?
A hammer appears only after a decline and clearly indicates a reversal; доджи can appear at any time and are more ambiguous in meaning.

How to analyze доджи?
Observe its real body (very small or nonexistent) and shadows (usually long). Once the pattern is confirmed, immediately scan surrounding technical signals—support and resistance levels, volume, other indicators—to verify.