A Doji candlestick pattern is a technical analysis pattern that occurs when the opening and closing prices of an asset are very close to each other, resulting in a candlestick with a very small body and long shadows or wicks. The appearance of a Doji candlestick pattern suggests indecision and uncertainty in the market, as neither buyers nor sellers have taken control of the price action.
The shape and position of the shadows or wicks of the Doji candlestick pattern are important in determining its significance. If the shadows are long, it indicates that both buyers and sellers were active during the trading period, but the price ultimately closed near the opening price, which suggests indecision. If the shadows are short or non-existent, it suggests that there was very little price movement during the trading period, and the Doji pattern may not be as significant.
