A doji is a candle that opens and closes at almost the same price. The body shrinks to a thin line, with wicks reaching out above, below, or both. It is the market's picture of indecision: buyers and sellers pushed price around during the bar and ended roughly where they started. On its own a doji settles nothing — its meaning comes entirely from where it appears.
The main variants
- Standard doji — a small or absent body with wicks on both sides. Plain indecision.
- Long-legged doji — long wicks above and below. A wide fight that resolved nowhere; more indecision, not less.
- Dragonfly doji — open and close near the high, a long lower wick, little or nothing above. Price was sold down and bought all the way back. At support after a fall, it can hint at a turn up.
- Gravestone doji — the mirror: open and close near the low, a long upper wick. Price was bought up and rejected. At resistance after a rally, it can hint at a turn down.
- Four-price doji — open, high, low and close all equal, a single dash. Usually a dead or thinly quoted market, common on illiquid pairs or quiet hours.
Context is the whole signal
A doji in the middle of a choppy range means little — the market is undecided all day there. The same candle at a level that has already turned price twice, right after a strong run, is worth attention. The candle marks a pause; the location tells you whether the pause matters.
A doji says "the last bar was a draw". It does not say who wins the next one. Wait for the following candle to break the doji's high or low before acting.
A worked example
Suppose you build an EA that shorts every gravestone doji on EURUSD, no other filter. Across a ranging month it fires forty times, and most of those dojis go nowhere — price drifts on as before. At roughly £3 of spread per round trip, forty noise trades cost about £120 in costs alone, before a single one is judged on direction. Now take the other approach: one gravestone doji, at a resistance level that held twice this week, after a clean rally, with the next candle closing red for confirmation. That is one trade, with a clear place to put a stop — just above the doji's high. Same candle shape, completely different quality, decided by context and confirmation.
A forex quirk worth knowing
On the daily chart, where the candle opens and closes depends on your broker's server time — the hour their trading "day" rolls over. Two brokers on different server times can print a doji on slightly different days, or one prints a doji where the other does not. If a daily doji is central to your plan, check which clock your broker keeps.
The Karnek note
Karnek reports the trades your account actually took and how they turned out, whatever candle triggered them. It reads the live terminal only, so it can follow a doji-based strategy without ever opening, closing or adjusting a position.
Written and reviewed by the Karnek Research team. Last updated August 2026.
Educational content only - not financial advice. Past performance does not predict future results. Trading carries significant risk.