What is a Northern Doji?

A Northern Doji is characterized by its occurrence during a rally. This candlestick pattern features a small body, indicating indecision in the market, but it typically appears after a period of upward price movement. The Northern Doji suggests that, while buyers have been in control, there is now uncertainty about future price direction. This is notable because it often indicates that the rally may be losing momentum, and traders should be cautious about potential reversals or consolidations in the trend.

While other factors may involve doji patterns, the significance of a Northern Doji primarily lies in its appearance during an upward price swing, providing crucial information about market sentiment and potential shifts in buying pressure.