✴ The importance of the doji candle in technical analysis:
It indicates hesitation in the market, especially if it appears after a strong trend (bullish or bearish).
It may indicate a trend reversal if it appears in strong support or resistance areas.
You need confirmation from the following candles before making a trading decision.
✴ When is a doji candle a reversal signal?
If it appears after a strong uptrend, it may indicate weakness of buyers and a possible price reversal to the downside.
If it appears after a strong downtrend, it may indicate weakness of sellers and a possible price rebound upwards.
The candle that comes after it should be watched to confirm the trend (such as an engulfing candle or another pattern that supports the reversal).
A practical example of a doji candle:
If there is a strong uptrend, then a doji candle with a long upper shadow appears, this may indicate selling pressure, and if it is followed by a strong bearish candle, this is a confirmation of a reversal to the downside.
Summary:
The Doji candle is a powerful tool in technical analysis, but it needs confirmation from subsequent candles or other indicators before making trading decisions.