Dragonfly doji candlestick pattern with Limitations

dragon fly doji means

This is because the price hit a support level during the trading day, hinting that sellers no longer outnumber buyers in the market. If the security is considered to be oversold, which may require the assistance of additional technical indicators, a bull movement may follow in the days ahead. This may be a chance for additional entry points, especially if the market has a higher open on the following day. The dragonfly doji works best when used in conjunction with other technical indicators, especially since the candlestick pattern can be a sign of indecision as well as an outright reversal pattern. A dragonfly doji with high volume is generally more reliable than a relatively low volume one.

dragon fly doji means

This tells that there were a lot of sellers for most of the day. As a result, buyers came in at the end of the day and pushed the price back up. The dragonfly doji is an interesting name for a candle that is supposed to act as a bullish reversal.


It is repeated quite often on financial charts, so it is possible to see a trading signal and an investment opportunity. The Dragonfly Doji is typically interpreted as a bullish reversal candlestick chart pattern that mainly occurs at the bottom of downtrends. The Dragonfly Doji is a Candlestick pattern that can help traders see where support and demand are located. It can be used with other indicators to identify a possible uptrend.

Is a dragonfly doji bullish?

The Dragonfly Doji is bullish. 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. The result is that the open, high, and close are all the same (or about the same) price.

If the price rises on the confirmation candle, the reversal signal is invalidated as the price could continue rising. We have a basic stock trading course, swing trading course, 2 day trading courses, 2 options courses, 2 candlesticks courses, and broker courses to help you get started. Dragonfly doji candlesticks form when the opening, high of the day, and closing are all the same, but the day’s low create a long shadow. Ideally, to increase the accuracy, we want to trade the Dragonfly Doji candlestick pattern by combining it with other types of technical analysis or indicators. First, this chart configuration marks the end of a downward trend movement.

What Does the Dragonfly Doji Look Like?

In a nutshell, price moves during the candle session but doesn’t change much at the end of the session. On a flat or range chart, this may not provide much to go on. But if you spot a Doji in a strong trending market, it could be a sign of waning momentum and a possible reversal imminent.

dragon fly doji means

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74%-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the dragon fly doji means high risk of losing your money. Or most commonly in shorter time frames – 5 minutes to tick level time frames. Our content is packed with the essential knowledge that’s needed to help you to become a successful trader.

Example of Dragonfly Doji Candlestick

This pattern indicates that buyers have driven the price higher. The colour of the candlestick is not important, so the dragonfly doji can be green or red. The trader must wait for a confirmation candle, or another signal, before placing a sell order. If the candlestick closes above the open, he can open a market order with a stop loss at the low of the doji. The dragonfly doji is a Japanese candlestick pattern that acts as an indication of investor indecision and a possible trend reversal.

  • The problem with dragonfly and gravestone doji candles is there is no candle body, which makes it impossible for the candle to actually close into the body of the previous candle.
  • My book,
    Encyclopedia of Candlestick Charts,
    pictured on the left, takes an in-depth look at candlesticks, including performance statistics.
  • Devoid of an upper shadow, this rather rare candle is composed of a long lower shadow and an opening/closing price at the highest.
  • The 10-day performance after the breakout ranks it 98th out of 103 candles, where 1 is best.
  • A gravestone doji occurs when the low, open, and close prices are the same, and the candle has a long upper shadow.
  • Dragonfly Doji indicate that there may be an imminent change in market sentiment or some sort of reversal from bullishness to bearishness happening soon.

Ideally, the confirmation candle also has a strong price move and strong volume. Two candlestick patterns which have a lot in common with pin bars both in terms of their construction and what they show in the market are the dragonfly and gravestone doji. Hanging man is a type of candle which forms on end of an uptrend and most of the times mean bearish reversal. Moreover, Hanging man candle has a bigger body in comparison to dragonfly doji candlestick.

What Is the Difference Between a Doji and a Spinning Top?

Thus, the bearish advance downward was entirely rejected by the bulls. Click below to consent to the above or make granular choices. You can change your settings at any time, including withdrawing your consent, by using the toggles on the Cookie Policy, or by clicking on the manage consent button at the bottom of the screen. However, the buyers were unable to create a new session high, hence why it is considered weak.

Is a dragonfly doji bearish?

Dragonfly Doji is a candle pattern with no real body and a long downward shadow, which is typical to it. It indicates price reversal, where open and close prices are the same or almost the same. It is an indication that bearish trends have been strong and fished for the bottom and found it.

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