When the open and close are both equal to the low of the session, we have the most bearish of doji: the
gravestone doji. As for the Dragon-Fly doji,
there's no need to be rigid with the rules, as long as you apply the logic of the pattern to recognize
where supply and demand are addressed,
you will be able to read the market in the right way.
So if we have a very small lower shadow, it's still fine. If we have a very small real body,
well, we can still consider the candle as a gravestone doji. Talking about the Dragon-Fly
doji,
we have said that it looks like a hammer.
What about the gravestone doji?
It's definitely a shooting star without a real body.
You can also see that the gravestone doji appears during an uptrend, just like the Shooting Star.
Here we have euro-dollar on a four-hour chart.
I give you five seconds to look for the gravestone though.
doji.
Ok,
here we have the Gravestone Doji.
If you paid close attention you may have noticed another Doji just two candles before the Gravestone
doji. The trend before the Gravestone doji is clearly up.
Buyers are winning the fight.
The gravestone doji expresses the same concept that we have introduced with the shooting star. Buyers
push the price higher from the very beginning of the session.
Again this is not a surprise because we are in an uptrend so traders expect the price to go up.
The surprise comes when sellers step into the market and manage to push the price back to the opening
price.
It may be that the market reached a point where the price is very convenient for the sellers but
it's not so convenient for the buyers anymore.
So the gravestone doji has the same logic of the shooting star
and we will use them in the same way during the course.