A Doji is a candlestick pattern that forms when the opening and closing prices of an asset are virtually equal, resulting in a very small or nonexistent body with upper and lower shadows (wicks). It signals indecision in the market, as neither buyers nor sellers were able to gain control during the period. Doji candles are particularly significant when they appear at key support or resistance levels or after extended trends, as they can indicate a potential trend reversal.
Example
“A Doji formed at the top of a strong uptrend on the daily chart, signaling indecision among traders and prompting many to tighten their stop-losses.”