Gravestone Doji

AAA

DEFINITION of 'Gravestone Doji'

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.

Gravestone_doji.gif

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Trend

    The general direction of a market or of the price of an asset. ...
  2. Doji

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

    A bullish candlestick pattern that consists of three candles ...
  4. Reversal

    A change in the direction of a price trend. On a price chart, ...
  5. Evening Star

    A bearish candlestick pattern consisting of three candles that ...
  6. Candlestick

    A chart that displays the high, low, opening and closing prices ...
RELATED FAQS
  1. What are the best technical indicators to complement the Ultimate Oscillator?

    Technical indicators used to complement the Ultimate Oscillator include candlestick patterns and moving averages. Developed ... Read Full Answer >>
  2. How do I implement a forex strategy when spotting a Rounding Top Pattern?

    A trader can implement an aggressive forex trading strategy designed to obtain maximum profit from recognizing a rounding ... Read Full Answer >>
  3. How do I build a profitable strategy when spotting a Gravestone Doji pattern?

    The gravestone doji is formed by a candlestick with a long upper shadow and no lower shadow, indicating that the price attempted ... Read Full Answer >>
  4. How is a Gravestone Doji Pattern, followed by a Dragonfly Doji, interpreted by analysts ...

    A gravestone doji candlestick pattern followed immediately by a dragonfly doji candlestick would most likely be interpreted ... Read Full Answer >>
  5. How effective is creating trade entries after spotting a Gravestone Doji pattern?

    The gravestone doji, with its identical open, close and low, and exaggerated upper shadow, can be a dramatic reversal signal. ... Read Full Answer >>
  6. How are Gravestone Doji patterns interpreted by analysts and traders?

    A gravestone doji pattern consists of a single candlestick in which the open, close and session low are identical, and the ... Read Full Answer >>
Related Articles
  1. Charts & Patterns

    The Basic Language Of Candlestick Charting

    If you want to use candlestick charting to get a sense of where a stock is headed, you need to learn how to read this unique charting language.
  2. Charts & Patterns

    Candlestick Charting: What Is It?

    Discover the components and basic patterns of this ancient technical analysis technique.
  3. Forex Education

    Candlestick Charting: Perfecting The Art

    Take a look at continuation patterns and how they can confirm or deny trends.
  4. Charts & Patterns

    Candlesticks Light The Way To Logical Trading

    Crowd psychology is the reason this technique works. Find out how to make it work for you.
  5. Charts & Patterns

    Advanced Candlestick Patterns

    Go beyond the basics! Learn to identify and trade island reversals, kicker patterns and more.
  6. Chart Advisor

    ChartAdvisor for May 29 2015

    Weekly technical summary of the major U.S. indexes.
  7. Trading Strategies

    Pros & Cons Of Day Trading Vs Swing Trading

    Day trading involves making dozens of trades in a single day, based on technical analysis and sophisticated charting systems. Swing trading is based on identifying swings in stocks, commodities, ...
  8. Charts & Patterns

    The 6 Most Profitable Grocery Stores

    These are the six largest grocery store chains operating in the United States.
  9. Chart Advisor

    Trade These Stocks on a Re-test of Breakout Level

    You can't always catch the breakout. If you miss it, you can still get in. Here are 4 stocks to watch for your "second chance" entry.
  10. Chart Advisor

    Cup and Handle Chart Patterns Forming Right Now

    A cup and handle is a relatively common chart pattern which can be used in various ways. Here it highlights stocks poised to make new highs.

You May Also Like

Hot Definitions
  1. Mixed Economic System

    An economic system that features characteristics of both capitalism and socialism.
  2. Net Worth

    The amount by which assets exceed liabilities. Net worth is a concept applicable to individuals and businesses as a key measure ...
  3. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  4. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  5. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center