InvestorQ : Is there only one type of flat DOJI or whether there are sub patterns in DOJI?
Abhisha Yadav made post

Is there only one type of flat DOJI or whether there are sub patterns in DOJI?

Answer
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Bhavika Nehru answered.
1 year ago


In technical analysis nothing is so simple and straight forwards. Most trends can be either clear trends or they can be deceptive trends. Hence to get a better understanding of DOJIs, it is essential to take a granular approach to DOJIs by breaking up the DOJI into smaller sub components. There are several variations of DOJI candlesticks, as we shall see, each with its own distinctive name and set of attributes and trend indications, as we shall see in the discussion about the granular parts of a DOJI.

Let us look at DOJI candlesticks in greater detail. The typical DOJI is the long-legged DOJI, where price extends about equally in each direction, opening and closing in the middle of the price range for the time period. The appearance of the candlestick gives a clear visual indication of indecision in the market. When a DOJI like this appears after an extended uptrend or downtrend in a market, it is commonly interpreted as a very strong signal of a likely trend reversal. Many traders and chartists also call this phase one of calibrated consolidation. Normally such DOJIs are indicative of a possible market reversal, a trend change to the opposite direction. That means a long bullish pattern may be changing into a bearish pattern or a long bearish pattern may be changing into a bullish pattern. In fact, even fundamental analysts normally ratify their trades by looking at the DOJIs for getting a clearer picture of whether their fundamental analysis is in sync with reality or not.