Doji Candlestick Pattern Explained // candle indicator analysis trading strategy chart


Doji Candlestick Pattern Explained // candle indicator analysis trading strategy chart stock spinning top day examples david moadel welcome to looking at the markets with
David Modell today we’re gonna learn about doji candles now I already made a
video about Candlestick charts just the basics so if you don’t really understand
Candlestick charts at all then you might want to check out that video and I’ll
put a link to it in the description all right but if you already understand the
basics of how to read candlesticks then the doji candlestick pattern can be very
very interesting to you all right so let’s check it out these are all doji
candlesticks and you might notice they all have something in common
they all have basically no body it’s totally flat okay
no body all right usually in a candlestick if there’s a body it’s it’s
going to be a rectangle of some sort either hollow or filled in but in this
case what this means is that the open and the close of the day or the minute
or you know depends on the timeframe of the candle but the the open and the
close for that candle were about the same okay they’re going to be really
close together so wherever it opened for that period and wherever it closed the
price for that period they’re about the same and so there’s really going to be
no body or very little all right and notice that they’re still wicks though
so this one has a small upper wick and a small lower wick but hardly any body
this one has more of an upper wick than lower this one has more of a lower wick
and an upper but they’re all doji candles
all right and then if there is a long wick and the the body or lack thereof is
at the top all right meaning that the it opened here and then the price went way
down and then came all the way back up and closed right about where it opened
for that period that’s called a dragonfly dragonfly doji
and that’s a special type of doji here’s another special type of doji candle and
this is the gravestone doji sounds ominous right okay so it’s the opposite
of the dragonfly doji where it opened here at the bottom and there’s a long
wick above so the price went up up up and then turned around and went down
down down and then closed again right about where it opened all right that’s
what makes it a doji is that all of these have the same thing in common
where you know the closing the open and the close are at about the same place
all right now the dragonfly doji is rather bullish because think about it
it opened here and then the Shorter’s and the sellers all tried to push it
down they tried and tried and they did push it down temporarily but then it
came right back up okay so any attempts to short it or push it down didn’t last
very long came right back up and at the end of the period it closed right about
where it opened all right and so you can have some expectation that perhaps in
the future in the near future the price might go up and not a hundred percent
guaranteed but it could happen okay and with the gravestone doji the doji
it’s the opposite it opened here and you know all the bowls and all the
people all the buyers you know pushed it up up up up but it couldn’t hold it and
it went down down down and closed right about where it opened and then you might
expect some more downward price action in the in the next candles again no
guarantee and this is just one thing to look at out of many factors you also
want to look at support and resistance and things like that and look at a look
at other indicators alright and one thing that like this doji for example
this would be an indecision type of candle okay perhaps a reversal might
come alright so if the previous candles were down down down but then you saw
this candle that might indicate some indecision okay the the market wasn’t
really sure whether it wanted to keep going down and you know there’s equal
buying pressure and selling pressure it was equal for that for that period for
that candle and so you might have a reversal in the making it might go back
up again this is not a perfect indicator but it could happen it that’s I’ve seen
it happen many times all right so a doji like this could be indecision this one
might be a little bit more bearish than bullish this one might be a little bit
more bullish than bearish this one’s definitely tending toward the bullish
and this one’s tending toward the bearish all right so let’s look at some
examples and these are daily candlestick charts and I want to thank
stockcharts.com that’s where I got them from when I give
them credit all right can you find the doji candle that indicated a reversal
well if you said it’s right there then your rights okay
and notice let’s go back a little bit which one does that one look like it
looks kind of like this one doesn’t it like a dragonfly doji it’s not perfect
all right it’s very it’s it’s not very common that
you’re gonna find find it exactly at the top or exactly at the bottom oftentimes
there’s usually a little bit of a wick above or below all right but anyway this
is definitely bullish looking and it turned out to be quite bullish over the
next few candles okay you could have made a nice profit there all right let’s
take a look at some other examples this is Tesla and can you find a reversal
that’s bearish well if you said it’s over here you would be correct okay and
this is one of those indecision type candles all right you can see the price
action went up steeply and then started to go kind of sideways ish and here’s an
indecision type of doji candle and then we saw it just go straight down after
that and so if somebody had shorted it here they would have done well or if
they had bought it here and just taken profits here because they saw that
candle they would have been right to do that here’s Johnson & Johnson the J the
daily chart all right can you find any of these doji candles well the harder to
find one is right here okay but this turned out to be bullish but it was a
turning point and you might have seen this one though okay and again it’s not
a perfect dragonfly doji but it’s pretty close the upper wick is not that big
alright but the lower wick is quite large and we saw that this was a
turnaround all right and let’s look at Netflix I’m
sure you can find the doji candle by now right yeah there it is right there
okay indicated a turn around for sure all right and so those those are just a
few examples they’re not perfect but they work you’d be surprised how often
they do work because of what they represent they can either represent
indecision or a change in direction and you want to look at the size of the
wicks whether you’ve got more of an upper wick or a lower wick that makes a
difference as well all right so explore those on your own
and I hope you found this introduction to doji candles helpful if you did then
please give this video a thumbs up leave comments and subscribe to my youtube
channel so you can receive the latest updates on my financial educational
videos and if you’d like some help with technical indicators candlestick charts
or putting together a trading or investing plan because you need to have
one you can email me at any time my email address is David Modell at
gmail.com thank you so much for watching and listening and I’ll talk to you again
soon thank you for watching please like
comment and subscribe and I’ll see you next time

12 thoughts on “Doji Candlestick Pattern Explained // candle indicator analysis trading strategy chart”

  1. I still look at candlestick charts, when deciding what, when and where (price levels) to trade. However, given today's market environment, its hard to place too much reliance on any one candle or short term reversal pattern. With all the Central Bank money finding its way into the stock market, I just don't trust market prices. Can we really rely on indicators which are supposed to reflect market psychology, (fear & greed) when algos constitute most of the trading activity nowadays?

  2. I know how to read candle stick charts but i dont get how people think 1 bullish candle means stock is bullish or bearish or neutral. If a 1 minute candle has a bullish pattern and then the 55 seconds candle has a neutral pattern what do you think about drawing conclusion about markets direction with a single candle or even taking it seriously.

  3. Dear David i am a big fan of yours and of course a a subscriber ..i liked all of your videos…you are a very good Teacher indeed..keep it up…

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