The first definition example listed above ("mistake") relative to candlestick charts is a mistranslation. That's b/c "doji" is one of those wicked little trip-you-up homophones, each with its own meaning: think of "sea", "see", "sì" or "C". The doji referred to in trading is written as 同事; the doji mistakenly defined as, well, mistake, is written as ドジ - and even if you can't read Japanese you can see that the two words (or more accurately, sets of characters) are quite different. So while "mistake" is one of the English meanings of the doji homophone, it's not the appropriate one here...
In this case, the accurate definition is "same event", b/c a doji candlestick shows us that although during a trading session a given security's price may move up or down from the opening level, it ends up closing at or very near its opening (the buyers and sellers were evenly matched). The opening and closing 'event' are the same. Hence, "same event".
But what's with all this Japanese terminology relating to candlestick charts anyway? - doji, marubozu, harami cross and so on? After all, candlestick charts are confusing enough on their own to the beginning trader... Well, there's a great reason and it's that we owe the very existence of these helpful charts (yes, like any other analytics tool, they're extremely useful once understood) to the Japanese: specifically one rice trader, brilliant innovator and observer of human & market psychology from the 1700's by the name of Munehisa Honma (本間 宗久), who first thought them up. Whose name, if you ask me, should translate as "terribly clever chap". ;-)
Comments by najat57
Najat57 commented on the word doji
The first definition example listed above ("mistake") relative to candlestick charts is a mistranslation. That's b/c "doji" is one of those wicked little trip-you-up homophones, each with its own meaning: think of "sea", "see", "sì" or "C". The doji referred to in trading is written as 同事; the doji mistakenly defined as, well, mistake, is written as ドジ - and even if you can't read Japanese you can see that the two words (or more accurately, sets of characters) are quite different. So while "mistake" is one of the English meanings of the doji homophone, it's not the appropriate one here...
In this case, the accurate definition is "same event", b/c a doji candlestick shows us that although during a trading session a given security's price may move up or down from the opening level, it ends up closing at or very near its opening (the buyers and sellers were evenly matched). The opening and closing 'event' are the same. Hence, "same event".
But what's with all this Japanese terminology relating to candlestick charts anyway? - doji, marubozu, harami cross and so on? After all, candlestick charts are confusing enough on their own to the beginning trader... Well, there's a great reason and it's that we owe the very existence of these helpful charts (yes, like any other analytics tool, they're extremely useful once understood) to the Japanese: specifically one rice trader, brilliant innovator and observer of human & market psychology from the 1700's by the name of Munehisa Honma (本間 宗久), who first thought them up. Whose name, if you ask me, should translate as "terribly clever chap". ;-)
September 4, 2017