However, if that same gravestone
doji appears after a downtrend, it becomes slightly bullish or indecisive.
A dragon fly
doji appears when the stock opens, falls sharply, but then makes a strong comeback and closes at its original price.
Time and time again, you will see a stock fall and fall and fall, and then
the doji appears.
Not exact matches
A gravestone
doji usually
appears after a stock made a strong run upward.
To trade the dragonfly
doji as an entry trigger, you would go through the same steps, except you would wait for a dragonfly
doji to
appear after a downtrend, and you would wait for a bullish confirming candlestick.
Instead of jumping into the market right away, when the gravestone
doji first
appeared, you would wait for a bearish confirming candle.
The same goes for the dragonfly
doji that
appeared later in the trend, but just look at that beautiful bearish engulfing pattern at the very top of the uptrend.
That same dragonfly
doji, if it
appears after an uptrend, becomes a slightly bearish or indecisive signal.
For instance, a dragonfly
doji that
appears after a downtrend (as shown above) is bullish.
Lastly, on the right side of the image above, you can see a dragonfly
doji that
appears after a small downtrend in price.
In the image below, you can see a gravestone
doji and a dragonfly
doji that
appeared in a choppy, (mostly) sideways period.
Unlike many of the other candlestick signals that we have learned about, the dragonfly and gravestone
dojis can have varying degrees of significance, depending on where they
appear in the overall price action of the market.