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

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

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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

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