candles · TRADING LEARNING GUIDE
Doji and small bodies
What is this concept?
Doji-style candles have nearby open and close. Exact equality differs from a small-body tolerance. Define thresholds in ticks or as a fraction of range before testing.
Step by step
Measure body/range, handle zero range and consider wick asymmetry, location and session. A subsequent confirmation bar provides new information.
From observation to decision
Record the instrument, venue, session and timeframe. Classify the observation using the definition, then write at least one alternative interpretation. Decide what evidence would invalidate your idea before entry. Mark missing information explicitly. Examples are hypothetical. Collect paper observations, including failures. Include fees, spread, slippage and timestamp alignment when measuring outcomes. Recognizing a chart shape and establishing a profitable trading rule are separate tasks.
Worked example
O100 C100.1 H105 L96 has body/range 0.1/9≈1.1%. With H100.2 L99.9 the same net move gives about 33.3%, a different shape.
Common mistakes and limits
Avoid automatic reversal labels, changing thresholds after outcomes or equating a small body with low activity.
Practice
Mark a fixed body/range threshold of 5% or less. Treat other thresholds as separate experiments.
Resources and further reading
These sources explain definitions and underlying mechanics. Worked examples are original illustrations; a source does not establish the profitability of a custom pattern.
Further reading / foundational context. Worked examples on this page are original illustrations, not source performance claims.