Recently, among people doing technical analysis, renewed attention is being paid again to Doji candlesticks. In fact, this pattern is a pretty important indicator for reading market turning points.

As for what a Doji candle is—simply put, it indicates a state where the buyers and sellers completely cancel each other out. Although the opening and closing prices are almost the same, during the day the price moves within a fairly wide range, giving it a somewhat unusual shape. For example, even if Bitcoin starts and ends the day at $20,000, during that time it might rise to $25,000 or fall to $15,000. The lengths of the upper shadow and the lower shadow reflect how intense the price action was at that time.

Historically, Doji candlesticks have served as the calm before the storm. If they appear during an uptrend, it may mean that the power of buyers is weakening. And if they appear at the bottom of a downtrend, they can also be a signal of a potential rebound. However, it’s dangerous to make a judgment based on this alone, so it’s important to combine it with other indicators such as RSI or MACD.

There are several types of doji patterns. The neutral doji has symmetrical upper and lower shadows, indicating a complete balance of power between buyers and sellers. In this case, if the RSI is in the overbought zone (>70), a correction might be near; if it’s in the oversold zone (<30), there may be a possibility of a rebound.

Next is the long-legged doji. This is a doji with long shadows, showing traces of buyers and sellers trying fiercely to control the price. The position of the closing price is important: if it’s below the middle, it’s a bearish signal; if it’s above, it’s a bullish signal.

The dragonfly doji (dragonfly doji) has a long lower shadow and looks like a T shape. When it appears at the end of a downtrend, it often becomes a buy signal. Conversely, during an uptrend, it becomes a warning of a possible reversal.

The gravestone doji has an inverted T shape and indicates a state where buyers tried to push the price higher but failed. If it appears during an uptrend, it may function as a reversal pattern.

Finally, the four-price simultaneous line (4価格同時線) is a pattern where the open, close, high, and low are all at the same level. This only happens when trading volume is nearly zero, so it has almost no practical value. It’s simply the moment when the market is completely at a loss.

Honestly, it’s risky to make buy/sell decisions based only on Doji candles. This pattern is only an indicator of the market’s indecision and is not a strong buy or sell signal. That’s why experienced traders combine Doji candlesticks with other technical indicators to make more accurate judgments. To catch market turning points, it’s important to develop the habit of looking at multiple indicators in a comprehensive way.