Types of Doji Types Traders must recognize

5 Types of Doji Formations In general, there are five (5) types of doji formations, namely Doji Star, Long-legged Doji (long-tailed doji, in which case the tail can go up or down), Gravestone Doji, and Dragonfly Doji ( the opposite of Gravestone Doji), and Four Price Doji.

Doji Star

This doji formation is the most balanced. The deviation of the highest and lowest prices is almost the same, so it shows the balance of the power of buyers and sellers in one period. If the Doji Star is formed in the overbought area of ​​the uptrend, it is likely that the price movement will reverse towards the downtrend. Conversely, if a Doji Star is formed in the oversold area of ​​a downtrend, it is likely that the price movement will reverse towards an uptrend.

Long-legged Doji (Long-tailed Doji)

If the Long-legged Doji formation like the picture above is formed in a downtrend, it is likely that the price movement will reverse towards the uptrend. The length of the tail indicates that the seller's previous sentiment was stronger, but has reversed following the buyers. Prices that have reached their lowest levels quickly reverse direction. The reverse can occur for uptrend movements.

Gravestone Doji

If this formation is formed on the uptrend movement, then it is likely that the price movement will reverse towards the downtrend. The same open and close prices indicate that the previous buyer sentiment is very strong, but has turned around following the seller. Prices that have reached their highest levels quickly turn to the lowest level. This formation is a special form of Shooting Star candlestick patterns which are usually quite valid. Dragonfly Doji Its properties are similar to Gravestone Doji, but are formed in downtrend movements.

Dragonfly Doji

indicates the most likely price movement will reverse towards the uptrend. This formation is a special form of the Hammer candlestick pattern.

Four Price Doji

 Four Price Doji are extremely rare, when compared to the other four types of doji formations. The shape resembles a horizontal line with no tail at all on the top or bottom of the body, while the body is very thin. Four Price Doji will only appear if the price values ​​of open, high, low, and close (OHLC) are exactly the same in the period of the formation of the candlestick bar. There is a complete uncertainty (complete indecision) which coincides with the low trading volume at that moment, so it cannot be considered as an indication towards a certain trend direction.