Dragonfly Doji Candlestick How to Trade Dragonfly Doji

dragonfly doji candle

Here’s a typical bullish pin bar with the open and close of the candle marked with two blue lines. You can see how there is an obvious difference between where the pin bar opened and where it closed. The information contained in this post is solely for educational purposes, and does not constitute investment advice. The risk of trading in securities markets can be substantial.

What does a doji mean in a downtrend?

In Japanese, Doji means mistake or blunder. It often appears during an uptrend or a downtrend, signifying equality between bullish and bearish trends.

What we really care about is helping you, and seeing you succeed as a trader. We want the everyday person to get the kind of training in the stock dragonfly doji market we would have wanted when we started out. We also offer real-time stock alerts for those that want to follow our options trades.

What Does the Dragonfly Doji Look Like?

In fact, Doji’s opening and closing session of the candle is almost the same. Dragonfly doji is like a T letter, but gravestone doji is like a reversed T letter. It’s better for you to looking for confirmation first and put a tight stop loss to open a trade.

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Doji has a lot of variations, for example, gravestone, long-legged doji, dragonfly, doji following a long bullish candlestick, etc., which could be confusing. You can learn more about how to interpret candlesticks in the article How to Read Candlestick chart. First, you determine the time frame and support/resistance levels. Below, you can see the support and resistance levels in the H4 timeframe; I also marked the local high.

Why Dragonfly And Gravestone Doji’s Are The Same As Pin Bars

This concern of the bears will allow the buyers to regain the upper hand in the market, so the sellers will be forced to buy back their short positions. The inability of the market to continue its downtrend reduces the bears’ negative sentiment. This pattern appears when the opening and closing are at the same level and when the low is significantly lower than the open, high, and close.

This pattern consists of a single candlestick and is known as a dragonfly doji because its shape resembles that of a dragonfly. RISK DISCLOSURETrading forex on margin carries a high level of risk and may not be suitable for all investors. Losses can exceed deposits.Past performance is not indicative of future results. The performance quoted may be before charges, which will reduce illustrated performance.Please ensure that you fully understand the risks involved.

What Do Dragonfly And Gravestone Doji Candlesticks Look Like ?

In short-term trading, one should take profit at the nearest support levels. More patient traders can wait until the price tests the resistance trendline to see where the price will go next. All ranks are out of 103 candlestick patterns with the top performer ranking 1. “Best” means the highest rated of the four combinations of bull/bear market, up/down breakouts.

  • On a daily bar, why does the price only reverse enough to reach the daily opening level?
  • That means one can enter an upward position by setting a tight stop loss and taking a relatively low risk.
  • Dragonfly doji candlestick gives you a sign of a price reversal 50% of the time or ranging before price continues its upward movement.
  • The downward movement of the next candlestick will provide confirmation.

Between 74%-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money. Especially if they are used with another indicator or support levels. However, it doesn’t always mean that the trend is guaranteed to change because of this dragonfly candle appearing. Prices will go much lower than the open price and then close the day close to or at the open price.

Bears Rejected by Bulls

That is, the market is full of strength, both bulls, and bears. In both cases, the appearance of these candles can mean a reversal, but one should wait for additional signals as a confirmation. Therefore, when the trend reaches a low, it is essential to discover a stronger signal to confirm the price reversal and the new trend start. Such a confirmation could be a Doji morning star pattern composed of three candlesticks. The dragonfly doji is an interesting name for a candle that is supposed to act as a bullish reversal.

  • This candlestick’s presence is most significant when it appears after a downtrend, preceded by bearish candlesticks.
  • The dragonfly doji is a candlestick pattern in the field of technical analysis.
  • After a downtrend, when they are found at the support, this can signal a bullish reversal.
  • It is used as a technical indicator that signals a potential reversal of the asset’s price.

HaiKhuu LLC was officially established in January 2018 by the Founder and CEO, Allen Tran. Allen and his team of professionals are actively working together to help the average retail trader become successful and profitable in the market. TradingView is currently providing a 30-day free trial for their premium subscriptions.


Market participants that aren’t already short see this weakness and look to get on board by selling the lows for a breakout trade lower. A Dragonfly Doji signals that the price opened at the high of the session. There was a great decline during the session, and then the price closed at the high of the session.

What is the opposite of the dragonfly doji?

The Gravestone Doji is the opposite of the Dragonfly Doji. It appears when price action opens and closes at the lower end of the trading range. After the candle open, buyers were able to push the price up but by the close they were not able to sustain the bullish momentum.

What does dragonfly doji indicate?

A Dragonfly Doji is a type of candlestick pattern that can signal a potential reversal in price to the downside or upside, depending on past price action. It's formed when the asset's high, open, and close prices are the same.

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