Common candle patterns: doji, hammer, engulfing

Traders have given names to certain candle shapes. You will hear these names everywhere, so it helps to know them. It helps even more to know their limits.

A doji is a candle where the open and close are almost the same, so the body is a thin line. It shows that buyers and sellers ended the period roughly even. Some traders read a doji after a long move as a sign of hesitation. On its own, it only says "this period was undecided."