Dragonfly Doji

What is a 'Dragonfly Doji'

A dragonfly doji is a type of candlestick pattern that signals indecision among traders. The pattern is formed when the stock's opening and closing prices are equal and occur at the high of the day. The long lower shadow suggests that the forces of supply and demand are nearing a balance and that the direction of the trend may be nearing a major turning point.

Dragonfly_doji.gif

BREAKING DOWN 'Dragonfly Doji'

A dragonfly doji pattern is a relatively difficult chart pattern to find, but when it is found within a defined trend it is often deemed to be a reliable signal that the trend is about to change direction. As you can see from the chart, on the day of the dragonfly doji (shown within the black box), traders realize that the price was sold down to unjustifiably low levels so they send the price back up to where the stock opened. The close near the day's open suggests that demand is again starting to outweigh supply.

RELATED TERMS
  1. Gravestone Doji

    A type of candlestick pattern that is formed when the opening ...
  2. Doji

    A name for candlesticks that provide information on their own ...
  3. Tri-Star

    A type of candlestick pattern that signals a reversal in the ...
  4. Long-Legged Doji

    A type of candlestick formation where the opening and closing ...
  5. Bearish Belt Hold

    A candlestick pattern that forms during an upward trend. This ...
  6. Pattern

    In technical analysis, the distinctive formation created by the ...
Related Articles
  1. Trading

    Star Formations Spotlight Luminary Trades

    Morning, evening and doji stars will have you basking in better trading profits.
  2. Trading

    Advanced Candlestick Patterns

    Go beyond the basics! Learn to identify and trade island reversals, kicker patterns and more.
  3. Trading

    Candlestick Charting: What Is It?

    Discover the components and basic patterns of this ancient technical analysis technique.
  4. Trading

    Using Bullish Candlestick Patterns To Buy Stocks

    These five popular candlestick chart patterns signal a bullish reversal in downtrend.
  5. Markets

    The 5 Most Powerful Candlestick Patterns (NUAN, GMCR)

    Statistics show unusual accuracy for the buy and sell signals of certain candlestick patterns like abandoned baby, evening star, and three black crows.
  6. Trading

    Analyzing Chart Patterns: Conclusion

    By Chad Langager and Casey Murphy, senior analyst of ChartAdvisor.com This introduction to chart patterns has provided a broad overview of chart pattern analysis and several of the largest patterns. ...
  7. Trading

    Candlestick Charting: Perfecting The Art

    Take a look at continuation patterns and how they can confirm or deny trends.
  8. Trading

    How To Interpret Technical Analysis Price Patterns: Triple Tops And Bottoms

    Triple and double tops and bottoms may be tough to spot, but once you learn them, they can be powerful patterns.
  9. Trading

    Analyzing Chart Patterns: Double Top And Double Bottom

    By Chad Langager and Casey Murphy, senior analyst of ChartAdvisor.com The double top and double bottom are another pair of well-known chart patterns whose names don't leave much to the imagination. ...
  10. Trading

    Continuation Patterns: An Introduction

    Those random movements in the charts actually form patterns. Learn the basics of what these patterns are.
RELATED FAQS
  1. What are common trading strategies when identifying a Dragonfly Doji pattern?

    Learn about the dragonfly doji candlestick pattern and what it signals for traders. Discover what strategies traders use ... Read Answer >>
  2. How do traders interpret a Dragonfly Doji pattern?

    Read about a rare but significant candlestick chart pattern: the dragonfly doji. Learn what a dragonfly doji says about a ... Read Answer >>
  3. What is the difference between a doji and a dragonfly doji?

    Learn why doji patterns on a candlestick chart are considered important, and discover how a dragonfly doji is interpreted ... Read Answer >>
  4. How is a Gravestone Doji Pattern, followed by a Dragonfly Doji, interpreted by analysts ...

    Learn the difference between gravestone doji and dragonfly doji candlesticks, and what interpretations traders apply to them ... Read Answer >>
  5. Are Doji patterns important when trading forex pairs?

    Find out why forex traders make heavy use of candlestick patterns such as the doji, which can be used as a signal of market ... Read Answer >>
  6. What are some of the most common technical indicators that back up Doji patterns?

    Learn important technical indicators that reinforce a doji candlestick pattern to take advantage of profitable trading opportunities. Read Answer >>
Hot Definitions
  1. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  2. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  3. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  4. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  5. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  6. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
Trading Center