What is a Doji candle?
A Doji candle is a candle pattern where the opening and closing prices are almost the same. In actual charts, it appears as a cross (+) or T-shape with little body.
The appearance of a Doji candle is a signal that buying and selling forces are tightly contested in the market. In other words, no one is in control — foreshadows a possible trend shift.
Do not make a trading decision based on just one doji! It must be judged in conjunction with previous trends + other indicators.
4 types of Doji candles
1. Standard Doji
Opening price ≈ closing price, upper and lower tail lengths are similar. It appears most commonly.
Meaning: Buy/sell balance → possibility of trend reversal or sideways movement
2. Dragonfly Doji (Dragonfly Doji)
Opening = closing price = high price, T-shaped with only the lower tail being long.
Meaning: A strong bullish reversal signal when occurring during a downtrend. The selling trend pushed back strongly, but the buying trend eventually returned.
3. Gravestone Doji (Gravestone Doji)
Opening price = closing price = low price, inverted T shape with only the upper tail being long.
Meaning: A strong bearish reversal signal when occurring during an uptrend. It reached a high point, but was eventually pushed down by a selling trend.
4. Four Price Doji
Opening price = closing price = high price = low price. Completely straight.
What it means: Appears in periods of extremely low volume or no volatility.
How to use Doji candles in futures trading
When used as a long trading signal
- Doji appears after downtrend
- It is even more powerful if it is in Dragonfly Doji form.
- If RSI is in the oversold range (below 30), it is the icing on the cake.
- Enter when the next bar is confirmed to be a rising bar
When used as a short trading signal
- Doji appears after uptrend
- Even more powerful if it is Gravestone Doji.
- Confidence ↑ if RSI is in the overbought range (above 70)
- Enter when the next bar is confirmed to be a falling bar
caution
| Situation | Reliability |
|---|---|
| Trending + Volume surge | ⭐⭐⭐ High |
| During sideways movement | ⭐ Low (meaningless) |
| At support/resistance level | ⭐⭐⭐ High |
| Appears alone (no pattern) | ⭐⭐ Medium |
Doji candle practical example
If you look at the Bitcoin 4-hour chart, doji candles often appear at major highs and lows. In particular, when the Gravestone Doji appears near a strong resistance, trend reversal confidence is highest.
Open the ‘BTCUSDT’ chart on Bybit and directly find the Doji pattern on a 1- to 4-hour basis.
Related guides
- Futures trading clearing price calculator →
- How to use RSI supplementary indicators →
- Complete explanation of hammer candles →