A doji forms on the Nasdaq roughly once a week on the daily chart, and roughly a third of the traders who spot one immediately call a top. Most of them are wrong, not because the doji is fake, but because a doji only ever says one thing: the session ended almost exactly where it started. It doesn't say which way it's about to break, and treating it as a directional signal is the single most common misread in candlestick trading.
What a doji actually shows
A doji has a body so small it's practically a line, open and close within a few points or pips of each other, with wicks extending above, below, or both. A daily EURUSD doji might show an open at 1.0850 and a close at 1.0851, one pip of net movement across the whole session, regardless of how far price wandered getting there. The tiny body means the two sides fought all session and ended in a dead heat. That's it. A doji is a scoreboard reading nil-nil, not a prediction of who scores next.
The variations, and what changes
A doji with long wicks on both sides, a long-legged doji, shows a session that traveled hard in both directions and settled flat, real volatility with no net winner. A dragonfly doji, long lower wick, almost no upper wick, shows sellers pushed price down hard and buyers took it all the way back to the open: that's closer to a pin bar in spirit. A gravestone doji is the mirror image, a long upper wick with the close back near the open, buyers pushed and sellers reclaimed it. These variants lean directional in a way a plain doji does not, but they still need the same thing every other pattern needs: a level to react against.
Where a doji actually earns attention
A doji appearing after a long, one-sided trend, gold grinding up from 2,380 to 2,430 over two weeks, then printing a doji right at a round number and a prior swing high, is worth watching closely: it shows the buying pressure that built the trend has stalled exactly where sellers would be expected to show up. A doji appearing in the middle of an already choppy, directionless range is close to meaningless, because indecision in a market that's already indecisive tells you nothing new. The pattern needs a strong prevailing move or a defended level to have anything to say.
Trading it honestly
The workable approach treats a doji at a real level as a warning, not a trigger. Wait for the next candle to actually confirm direction, a close back below the level after a gravestone doji at resistance, for instance, before entering, and place the stop beyond the doji's own extreme. Acting on the doji itself, before any confirmation, means trading pure indecision, which by definition carries close to a coin flip's worth of edge attached to it. On a $10,000 account, a confirmed gravestone doji setup on gold with a $7 stop beyond the wick, at $100 per dollar move per standard lot, sizes to roughly 0.14 lots under the 1% rule, small enough that a wrong read costs a rounding error rather than a real dent in the week.