What it is
A doji is a candle whose open and close are effectively equal, leaving a very small or non-existent real body with shadows on one or both sides. It represents a session in which buyers and sellers finished roughly where they started: indecision, or an even balance of pressure.
How it works
Variations carry different implications. A long-legged doji has long shadows on both sides and describes a wide, volatile, undecided session. A dragonfly doji has a long lower shadow and almost no upper one, so price was rejected from below. A gravestone doji is the inverse. A four-price doji, where open, high, low and close are identical, usually just means the instrument barely traded and should be ignored.
How traders use it
A doji is a context signal and never a standalone one. Appearing after an extended run into a level that already matters, it says the prevailing side has lost its grip and puts the next candle under scrutiny; appearing in the middle of a quiet range it says nothing at all. Practitioners require confirmation, meaning a close beyond the doji's range in one direction, before acting on it.
Where it breaks down
In twenty-four-hour markets the open and close are administrative boundaries rather than real events, so doji frequency depends on which session convention the chart uses. Studies of single candlestick patterns in isolation generally find negligible predictive power; whatever value the pattern has comes from where it forms and what follows it.
Educational reference. This entry describes how a concept is defined and used. It is not investment advice, not a recommendation, and not a signal. Any rule you build from it should be tested with realistic costs before it is traded, and no historical result guarantees a future one.