A doji is a candlestick that often indicates a trend reversal. Look at the diagram below. It has a clear upward trend until a doji appears showing that buying momentum has ceased. Weak buying and selling are now occuring.

1. Traders saw this as a buy opportunity and this continued for a while creating an upward momentum.

2. At a certain level there was no more buyers indicating the perception that this was no longer an attractive price. Sellers did not enter aggressively enter showing haste and uncertainty.

3. More aggressive traders may choose this as an entry point. Especially if this stock tried to reach the high of the day and did not. More conservative traders may wait for more confirmation of a trend change , such as a red candle with a full body, before entering.

4. If the major markets took a downtick at this moment there would be even greater probability of a downward trend as buyers will have less reason to enter and sellers will have more reason to sell. These moments only happen for an instance you must be ready.