Doji
Doji is one the most
important candlesticks formations. This pattern implies indecision in
the market place as buyers and sellers are exterting equal pressure
on the markets. In addittion, this pattern shows that there has been
a large trading range. But the price does not closeon an upside oe
downside bias. A true doji formation has an horizontal line instead
of a body, with a long wiks. There are numerous varieties of dojis,
with some examples found in Pictures , but they all connote
indecision on the part of the market. If the market ia a range
trading the doji indicates a neutral market. If the market is a
ralling, a doji is a signal that may be losing steam an the price may
start to decline from here. If the market is declining, a doji is a
signal that the decline may be ending and the market may start to
decline from here. Therefore, a doji provides signals of potential
market top or bottoms. Hower it is also important to compare the doji
to recent price action. If there has been a series of near doji or
small candles the doji formations is less significant. A doji formation is significat it is appears after a long green candle in an
uptrend or a long red candle in a dow trend. A double doji shows that
buyers and sellers are still in equilibrium, wich further indicates
that a trend reversal is probably imminent.
A simple doji candle, which displays
amuted range and a close equal to the open.
A long-legged doji candle, which shows
a wide-ranging day with both bulls and bears at a standstill by the
end of the period.
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