On a candlestick chart, Doji form when the opening and closing prices are virtually equal. They may be open or filled, ie slightly up or down, but the body of the candlestick will be very small to non-existent.
Their upper and/or lower shadows may be pronounced – that is, there may have been significant movement during the session, but the important factor is that when the dealing’s done everything has gone back to where it started.

Doji indicate indecision in the market. Prices move above and below the opening level during the session, but close at or very near this level. So there’s an equilibrium in the final result, neither bulls nor bears could take over the market and create a trend.

Long-legged doji
Long-legged doji have long upper and lower shadows that are almost equal in length. So there has been strong movement, up and down, from the session open, but again cancelling itself out by the close. The longer the shadows, the greater the indecision in the market.

There’s also a 4-point doji – open, close, high, low = identical.

Interpretation of Doji

Doji have little to no significance on their own.

They must always be considered in relation what’s been happening – the past. Any bullish or bearish bias to the market is based on preceding movements in price. You simply can’t, and won’t be, making an accurate assessment of the market by looking at doji in isolation. Perhaps an obvious point, but always worth reiterating, I think…

Dragonfly Doji
The candlestick looks like a T with a long lower and no upper shadow.
Dragon fly doji form when the open, close and high are very similar, but the low has made a long lower shadow. During the session there’s been a strong selling pressure, bears have predominated – but they haven’t won – there’s been a rally before the close to bring the price back to where it started.

Again, the previous trend needs to be considered. Clearly, if there’s been a preceding down trend, this may be evidence of a reversal. The bearish market may have run out of steam and a period of revival, or level trading, may be ahead.
The alternative, a dragonfly doji combined with a previous up trend, is perhaps more difficult to interpret – yes, the impetus in the trend has been lost – but permanently or just a pause in the action? Other indicators are needed before being able to make a sensible call.

Gravestone Doji
Gravestone doji are the reverse of a dragonfly – an upside down T, long upper shadow and no lower shadow – bulls dominated the trading period and pushed prices up, but by the end of the session, the bears had returned and sold enough to push the price back to its opening level. Again, any interpretation requires the context – what has happened before in terms of trend – and is going to be as with the dragonfly doji, but reversed – which I’ll leave for you to think through…