Like the hammer pattern, the doji candlestick pattern is also made up of only one candle. In this case, however, it resembles a “+” sign rather than a candle. This is because the classic doji has the same closing and opening price and the same long lower and upper shadow. A doji pattern means indecision in the market, buyers and sellers are equally strong and so it is not clear which way the price will move next.
This type of doji has long upper and lower wicks, indicating significant uncertainty and strong fluctuations between bulls and bears. Although the opening and closing prices are close together, the large range between the high and low indicates a struggle between buyers and sellers.
The dragonfly doji has a long lower wick and no upper wick, with the opening price, maximum and closing price almost the same. This formation may indicate a trend reversal, especially when it appears after a long decline.
Opposite to the dragonfly doji, the gravestone doji has a long upper wick and almost no lower wick. The opening and closing price is at the lowest level of the trading range. This pattern often indicates a bullish failure and a possible reversal of the downtrend.
A price doji is a variation of the classic doji where the opening and closing prices are exactly the same or very close to each other, and the range between the high and low can vary. This type of doji shows a complete balance between buyers and sellers.