2004issue C101-3
Doji construction, shadow geometry, and confirmation
A doji is constructed by collapsing the real body when open and close nearly match, then classifying leftover shadows. Neighboring long real bodies and a later confirmation print are required before the pause is treated as a turn.
- A doji is constructed when open and close are equal or nearly equal, shrinking the real body to a thin rectangle or a horizontal line.
- Shadow length varies independently around that thin body, so the same rule can print as a plus sign, a cross, a dragonfly, or a gravestone.
- A lone doji records indecision and is treated as neutral until it appears among long real bodies and is checked against later price action.
- Accept or reject the suggested pause only after a confirmation print: a later gap or a long real-body candle.
Price as a printed snapshot
This chart method treats the printed price as a complete snapshot of known information. It treats price paths as a mix of trending stretches and unstructured intervals.
How a candlestick is built
A candlestick is built from the open-high-low-close set. A two-dimensional real body covers the open-to-close span, and thin shadows reach the session high and low.
Fill is a construction rule. The real body is filled when the close is below the open and left empty when the close is above the open.
A long empty body is read as buyers in control. A long filled body is read as sellers in control. A small body is read as an unresolved contest between the two.
Collapsing the real body
A doji is constructed when open and close are equal or nearly equal. That match shrinks the real body to a thin rectangle or a horizontal line.
Leftover shadow geometry
Shadow length can vary independently around that thin body. The same doji rule can look like a plus sign, a cross, or an inverted cross.
A dragonfly doji has a long lower shadow and no upper shadow. Dragonfly geometry records a recovered session low and can support a bottom hypothesis after a decline or a downswing hypothesis after an advance.
A gravestone doji has a long upper shadow and no lower shadow. Gravestone geometry records a failed session high and can support the opposite pair of hypotheses.
Neighboring size and confirmation
A lone doji records indecision and is treated as neutral. It becomes more informative when it appears among long real bodies and is checked against later price action.
After a run of long empty advancing candles a doji can mark fading buying pressure. After a run of long filled declining candles it can mark fading selling pressure.
A later gap or long real-body candle is used as confirmation. That confirmation print is used to accept or reject the pause suggested by a doji.
All readings on this track · 11 readings
- 1992Constructing signed engulfing and doji detectors
- 1997Candlestick breadth timing on the 1996 S&P 100
- 2002Reading doji and engulfing after extended trends
- 2002A three-lock checklist for doji, gap, and stochastic reversals
- 2002Candlestick reliability after one-day follow-through
- 2004Constructing trendline calls with doji and engulfing
- 2004Doji construction, shadow geometry, and confirmation
- 2011Candlestick signals are not automatic trades
- 2011Breakout side versus catalog labels on finished candle recipes
- 2011Grading candlestick signals by frequency, trend, and breakout
- 2015Constructing candlesticks, doji, and hammer from OHLC