Types of Doji Candles: A Simple Guide for Traders
Candlestick patterns are like a trader’s visual language. They tell stories about market sentiment, buyer-seller battles, and possible turning points. Among them, Doji candles are unique since they often present themselves when the market is in a state of indecision- a moment of confusion. If one has ever considered a chart and seen a candle with a very tiny body and bigger wicks, then that’s what we call a Doji.
In this guide, we will dwell into the types of Doji candles, what they represent, and how traders implement them in their trading journey.
What Is a Doji Candle?
A doji candle appears when the opening and closing price of a candle is almost at the same level. This makes a tiny or almost invisible candle body, with upper and lower wicks of the candle. It demonstrates a tug-of-war with the buyers and sellers, with neither side gaining the upper hand.
Imagine a match where both teams score the same — that’s what a Doji represents. It tells traders, “Wait, the market is uncertain here.”
Why Doji Candles Matter in Trading ?
- They show market indecision or a possible trend reversal
- Often appear near support or resistance zones
- Help confirm or reject bullish or bearish bias
- Can form part of larger chart patterns
1. Standard Doji Candle
This is the basic Doji — a candle with nearly equal open and close prices, and usually short upper and lower wicks.
What It Means:
Pure indecision
Market is waiting for more information
Often appears during consolidation phases
When to Use:
On daily or hourly charts during sideways movement
With confirmation from volume or next candle
2. Dragonfly Doji
The Dragonfly Doji has a long lower shadow, almost no upper shadow, and the open and close are at or near the high of the session.
What It Means:
Sellers pushed the price lower, but buyers fought back
Signals potential bullish reversal when found in a downtrend
Real-Life Example:
Let’s say a stock falls sharply for three days. Then you spot a dragonfly doji. It suggests that selling pressure is weakening, and buyers are gaining strength.
3. Gravestone Doji Candlestick
A Gravestone Doji candlestick looks like an upside-down “T”. It has a long upper shadow, little or no lower shadow, and the open and close are at the low.
What It Means:
Buyers tried to push the price higher but failed
Strong selling pressure
May signal a bearish reversal, especially in an uptrend
Usage Tip:
Combine with volume analysis. If volume is high on a gravestone doji, it’s a stronger bearish signal.
4. Long Legged Doji Candlestick
The long legged Doji candlestick has bigger wicks on both sides and a very tiny body in the center.
What It Means:
Extreme market uncertainty
Both bulls and bears were aggressive but ended up equal
Appears during volatile conditions
Example in Trading:
In a high-volume session, if this Doji appears after a sharp move, it might suggest that the market needs a pause or a reversal is coming.
5. Bullish Doji Candlestick
This isn’t a specific shape but rather a Doji that appears in a bearish trend and signals a potential bullish reversal.
What It Means:
Sellers are losing control
Buyers might take over soon
Works best when followed by a bullish confirmation candle
Example:
If a stock has been falling for several days and a Doji appears near a support zone, followed by a green candle the next day — that’s a bullish doji candlestick signal.
Table: Summary of Types of Doji Candles
Type of Doji | Shape | Signal Type | Common Location |
Standard Doji | Equal open and close | Neutral/Indecision | Sideways markets |
Dragonfly Doji | Long lower shadow | Bullish reversal | End of downtrend |
Gravestone Doji | Long upper shadow | Bearish reversal | End of uptrend |
Long Legged Doji | Long upper & lower shadows | Confusion | Volatile sessions |
Bullish Doji Candlestick | Varies (contextual) | Bullish reversal | Near support zones |
How to Trade Using Doji Candles
Doji candles are very helpful, but they shouldn’t be used by itself. Here some practical ways to implement them:
- Confirm with trend movement: In an uptrend, gravestone doji may tell us to be cautious. In a downtrend, dragonfly doji can suggest a bounce.
- Watching volume: High volume on a doji increases the reliability on the pattern..
- Use with indicators: One must combine RSI, MACD and moving averages for signal confirmation.
- Waiting for confirmation: The candle after the Doji is vital. A strong bullish or bearish candle can boost our confidence.
Real-Life Example of a Dragonfly Doji
Lets say a stock like TCS has been descending from ₹3700 to ₹3400 over two weeks. Suddenly, a dragonfly doji forms on the daily chart, with a long lower wick and closing above the day’s high. The next day, a green candle forms and the price moves up. This tells us the buyers are stepping in — a potential reversal point.
When Do Doji Candles Fail?
Not all Dojis are accurate. They might give false signals if:
- The market is illiquid
- There’s no strong volume
- You rely on Dojis without confirmation
The key is to see them in context, not in isolation.
Conclusion:
Reading Doji candles is like reading the market’s body language. When you see a dragonfly doji, you’re watching bulls push back after a fall. A gravestone doji candlestick shows sellers overpowering buyers. The long legged doji candlestick tell us that market is in a confusion state. And when a bullish doji candlestick appears at the support zone, it’s like an indication that things can flip around.
By training oneself to analyze these patterns and implementing them along with volume, price levels and indicators, one can make wise trading choices.
Doji candles don’t show us the exact thing to do while trading, but they ask one to pause and analyse deeply. Sometimes, that pause can make the most difference.
Also Read : Large Cap Stocks at 52-Week Low in 2025
FAQ'S
What are the most reliable types of Doji candles?
Dragonfly Doji and Gravestone Doji candlestick are often the most trusted ones as they clearly show a shift in buyer or seller dynamics. Their shape and position suggest strong clues, especially when they appear at major support or resistance zones.
What does a long legged doji candlestick tell us about the market?
The long legged doji candlestick shows that prices moved up and down a lot during the session, but ended around where they started. This shows uncertainty — traders aren’t sure whether to push prices higher or lower.
What does a dragonfly doji mean in trading?
A dragonfly doji forms when prices go low during the session but close near the opening price. It usually means buyers stepped in and may signal a price reversal.
What should I combine with Doji candles to improve accuracy?
Use Doji candles with trendlines, moving averages, RSI, or MACD. Also consider support/resistance zones. This combination helps confirm if the Doji is just noise or a true reversal signal.
