Doji candlesticks are important signals that traders look for in technical analysis of financial markets. They are formed when the opening and closing price of an asset are the same or very close to each other.
There are several types of Doji candlesticks:
Standard Doji: This is the most basic type of Doji, where the opening and closing price are the same.
Long-Legged Doji: This Doji has long upper and lower shadows, indicating that there was significant price movement during the trading session, but the opening and closing prices were still very close to each other.
Dragonfly Doji: This Doji has a long lower shadow and no upper shadow, indicating that buyers were able to push prices up from the lows, but sellers were able to push prices back down to the opening price.
Gravestone Doji: This Doji has a long upper shadow and no lower shadow, indicating that sellers were able to push prices down from the highs, but buyers were able to push prices back up to the opening price.
Doji candlesticks are significant because they indicate indecision in the market, and can signal a potential reversal in trend. Traders often use other technical indicators, such as trend lines, moving averages, and volume, to confirm a potential trend reversal signaled by a Doji candlestick.
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