Gravestone Doji


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.


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.

  1. Trend

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

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

    A chart that displays the high, low, opening and closing prices ...
  4. Doji

    A name for candlesticks that provide information on their own ...
  5. Reversal

    A change in the direction of a price trend. On a price chart, ...
  6. Morning Star

    A bullish candlestick pattern that consists of three candles ...
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  3. How do I build a profitable strategy when spotting a Gravestone Doji pattern?

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