Doji Candlestick Pattern-rare But Easy To Spot And Highly Profitable!

A Doji Candlestick Pattern is very easy to spot but it forms rarely when the opening and the closing prices of a security or a currency pair are the same. So there is no stick on the Doji Candlestick Pattern. It is all wicks with no candle body. In essence, a Doji Pattern looks like a cross. There are a few variation to this important pattern. Read this article to know more how profitable this pattern can be.

In other words, the opening and the closing prices should be the same for a Doji to be formed. So for a Doji to be truly formed on a trading day, throughtout the trading day heavy buying or selling may take place but at the end of the day, the price should be where it had been at the start. In other words, the opening and the closing prices should be the same for a Doji to be formed.

What's so special about the Doji pattern? The special thing about this pattern is that it is a signal that the market is about to turn. Doji is an indication that the battle between the bulls and the bear has been equal. The day ended with a draw between the bulls and bears but the next day one side is going to overpower the other.

A Dragonfly Doji pattern is unique in the sense that the opening, closing and the high prices are all the same or equal. A Dragonfly Doji is formed when the stocks opens, trades down during first part of the day. During some part of the day, the price starts to climb again and eventually closing on the high which is the same as the open.

In other words, the open, the close and the high for the day are the same for the Dragonfly Doji to form. So when a Dragonfly Doji Pattern is formed, the bears had been in control of the market at the start. But at some point in the trading day, the bulls become active and step in. Bulls start buying. This takes the prices up and at the end of the day, the security price ends up right where it had started.

The low of the Dragonfly Doji can be considered a near term support level because it is clear that the buyers stepped in at that level and turned the trend from down to up. Dragonfly Doji is a bullish candlestick pattern.

When a Bearish Gravestone Doji Pattern is formed, it is a signal that a prolonged downtrend is about to start in the market. The second important variation to the Doji is the Bearish Gravestone Doji. This pattern is formed when the open and close of the day is equal to the low of the day. This is something opposite to the Dragonfly Doji where the open, the close and the high were equal.

A Doji pattern is very easy to spot on the candlestick chart as there is no body just the wick. Open close and either low or high all three are equal and the candle looks more like a cross. When you spot the Doji, get ready for a trend change in the price action.