Gravestone Doji

What is a 'Gravestone Doji'

A gravestone doji is a type of candlestick pattern that is formed when the opening and closing price of the underlying asset are equal and occur at the low of the day. The long upper shadow suggests that the day's buying buying pressure was countered by the sellers and that the forces of supply and demand are nearing a balance. This pattern is commonly used to suggest that the direction of the trend maybe be nearing a major turning point.

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BREAKING DOWN 'Gravestone Doji'

A gravestone doji pattern is a common reversal pattern used by traders to suggest that a bullish rally or trend is about to reverse. It can also be found at the end of a downtrend, but this version is much more rare. As you can see from the chart, on the day of the gravestone doji (shown within the black box), bearish traders realized that the price was pushed up to unjustifiably high levels so they send the price back up to where the stock opened. The close near the day's low suggests that supply is starting to outweigh demand again.

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RELATED FAQS
  1. How do I build a profitable strategy when spotting a Gravestone Doji pattern?

    Learn a low-risk, potentially high-reward trading strategy that traders use when they have identified a gravestone doji candlestick ... Read Answer >>
  2. How are Gravestone Doji patterns interpreted by analysts and traders?

    Understand how the Gravestone Doji candlestick pattern is interpreted by analysts and traders and what factors influence ... Read Answer >>
  3. How effective is creating trade entries after spotting a Gravestone Doji pattern?

    Understand what factors influence the effectiveness of a trading strategy based on the gravestone doji pattern, including ... 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 >>
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