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A doji forms when a candle opens and closes at virtually the same price, leaving a tiny or non-existent body that looks like a cross or plus sign. It generally signals indecision, as neither buyers nor sellers clearly dominated the period. After a strong trend, a doji may indicate that momentum is weakening and that a reversal is possible, but it does not predict a reversal on its own. Traders typically consider the surrounding price action and other indicators for additional context. A doji by itself shows hesitation, not a guaranteed direction.

The main types are the standard or neutral doji (small equal wicks), the long-legged doji (long wicks both sides, showing high volatility and indecision), the dragonfly doji (long lower wick, no upper wick, a potential bullish reversal), and the gravestone doji (long upper wick, no lower wick, a potential bearish reversal). Each reflects where price was rejected during the period, giving clues about which side may be losing control.

A doji is neither inherently bullish nor bearish; it represents indecision. Its meaning depends on context. A doji after a strong uptrend can hint at a bearish reversal, while one after a downtrend can hint at a bullish reversal. Dragonfly dojis lean bullish and gravestone dojis lean bearish. Because a single doji only shows hesitation, traders wait for the next candle to confirm the direction before acting.

Traders generally do not rely on a doji alone. Instead, they may view it as an indication that momentum could be slowing and look for confirmation from subsequent price action. For example, a bearish candle following a doji after an uptrend may provide additional context when assessing potential market direction. The location of the doji can also be relevant, as a doji forming near a key support or resistance level may provide further context.

On the WrPro platform, remember that CFDs are leveraged products and involve a high level of risk. Consider appropriate risk-management measures, including setting a stop-loss where suitable, before entering a trade. Past price patterns do not guarantee future results.

Both can indicate indecision, but the main difference is the size of the candle body. A doji has an extremely small or virtually non-existent body because the open and close prices are the same or nearly identical. A spinning top has a small but visible body with wicks on both sides, indicating that the price moved slightly between the open and close.

A doji can reflect a relatively even balance between buying and selling pressure, while a spinning top indicates indecision alongside a small net price movement. Neither pattern guarantees a reversal or a particular market direction, so traders typically consider the surrounding market context and subsequent price action when interpreting them.

A doji is a useful warning sign but not a reliable standalone signal, since indecision does not always lead to a reversal; a trend can simply pause and continue. Its usefulness may increase when it appears at significant support or resistance, after an extended trend, or when volume and subsequent candles provide additional confirmation. Treat a doji as one piece of evidence indicating probability, not certainty, and combine it with other technical analysis tools and appropriate risk management.