Dragonfly Doji
Candlestick PatternsA doji candlestick where the open, close, and high are at the same level with a long lower wick. It signals bullish rejection when appearing at the bottom of a downtrend.
What Is a Dragonfly Doji?
The dragonfly doji is a specific type of Doji that looks like a capital T. The open, high, and close are all at or near the same price (the top of the candle), with a long lower shadow extending below. There is no upper shadow.
During the session, sellers pushed the price significantly lower, but buyers stepped in and drove it all the way back to the opening price. This rejection of lower prices creates a shape resembling a dragonfly.
Bullish Signal
When the dragonfly doji appears at the bottom of a Downtrend on EUR/USD, it is a bullish reversal signal. The long lower wick shows strong demand at the session's low. If the next candle confirms by closing higher, traders enter long with a stop below the dragonfly's low.
The longer the lower shadow, the more significant the rejection. A dragonfly doji at a key Support level is one of the clearest single-candle bullish reversal signals.
Context Matters
At the top of an Uptrend, a dragonfly doji is less common and harder to interpret. It still shows rejection of lower prices, so it may simply confirm bullish continuation. As with all doji patterns, rely on the surrounding price action and key levels rather than the candle in isolation.
Related Terms
Gravestone Doji
A doji candlestick where the open, close, and low are at the same level with a long upper wick. It signals bearish rejection when appearing at the top of an uptrend.
Doji
A candlestick where the open and close are virtually equal, forming a cross or plus shape. It signals market indecision and a potential reversal.
Hammer
A bullish reversal candlestick with a small body at the top and a long lower wick at least twice the body length. It appears at the bottom of a downtrend.
Long-Legged Doji
A doji with very long upper and lower wicks, showing extreme indecision as the price swung widely in both directions before closing near the open.