Doji
A cross-shaped candle where buyers and sellers end the session at a standoff, warning that the current trend may be losing steam.
Definition
A Doji is a Japanese candlestick pattern that forms when a session's opening and closing prices are virtually identical, producing a candle with a negligible or absent real body. The result is a cross or plus-sign shape, with upper and lower shadows extending from the same price level. Because neither bulls nor bears could establish control, the Doji is universally recognised as a symbol of market indecision. It often appears at turning points and is frequently used alongside support and resistance levels to assess reversal probability.
Why it matters
On NSE and BSE, intraday and positional traders watch for Doji candles after extended moves because they can mark exhaustion. A Doji appearing at the top of a rally in Nifty or a large-cap stock raises the question of whether buyers have run out of conviction. Similarly, a Doji at a significant support level after a sell-off may indicate that selling pressure is ebbing. In the F&O segment, option writers pay close attention to Doji signals near expiry because a reversal can rapidly shift the delta profile of short positions. The pattern is not a standalone signal — traders typically wait for the next candle to confirm direction before acting.
How it works
There are several Doji varieties. The standard Doji has roughly equal upper and lower shadows. A Long-Legged Doji features extended shadows on both sides, reflecting extreme intraday volatility that resolves to indecision. A Gravestone Doji has a long upper shadow and no lower shadow — prices rallied but were completely rejected, which is bearish. A Dragonfly Doji is the inverse: a long lower shadow with no upper shadow, suggesting buyers defended the lows, which can be bullish. In all cases, the defining characteristic is the near-absence of a real body. The smaller the body relative to the total candle range, the more significant the indecision signal.
Example
Suppose Nifty 50 opens at 24,200 on a hypothetical trading session, trades as high as 24,350 and as low as 24,050, then closes at 24,205. The real body is only 5 points wide while the total range is 300 points. This forms a Long-Legged Doji. Coming after a seven-session uptrend, many technical traders would interpret this as a warning that buying momentum is fading and would wait for the next session's candle before entering a short or trimming longs. These are illustrative figures only and do not represent any actual market level.
Spot Doji patterns in real time
TradePulse's live option chain shows strike-level data that helps you time entries after candlestick signals like the Doji.