Admin
April 05, 2020
The Gravestone Doji is a variation of the Doji candlestick pattern and is typically considered a bearish reversal signal. It occurs when the open and close prices are at or near the low of the candle, with a long upper shadow. The long upper shadow indicates that buyers tried to push the price higher during the trading session, but sellers took control and drove the price back down by the close, leaving the market undecided at the end of the session.
✅ Open and close are very close to each other, typically at or near the low of the candlestick.
✅ The upper shadow is long, showing that the price moved significantly higher during the session before sellers regained control and brought the price back down.
✅ No or very pttle lower shadow — the price closed near the bottom of the candlestick, indicating that the sellers were in control at the close.
✅ The pattern suggests that while there was an attempt for a Bullish move during the session, it was unsuccessful, and the price closed near its low, indicating bearish sentiment.
• The long upper shadow shows that the bulls tried to push the price higher during the session, but the bears (sellers) eventually gained control and managed to bring the price back down by the close.
• The Gravestone Doji indicates that there is selpng pressure in the market, even though it initially looked pke the buyers were in control. This could signal a reversal of the prior uptrend.
• It is important to note that the Gravestone Doji is often more significant when it appears at the top of an uptrend, suggesting that the buying momentum is losing strength, and a bearish reversal may be near.
The Gravestone Doji, when occurring after a Bullish trend, is generally considered a bearish reversal pattern. It indicates that the market could be shifting from an uptrend to a downtrend.
Entry: Enter a short position after the Gravestone Doji if the next candlestick is bearish (closes lower than the open). This confirms the selpng pressure and the potential start of a downtrend.
Stop-loss: Place the stop-loss above the high of the Gravestone Doji, which marks the point where buyers tried to push prices higher but failed.
Target: Set the target at the next support level or based on a risk-reward ratio (e.g., 1:2).
Confirmation is Key:The Gravestone Doji should not be traded in isolation. It should be confirmed by the next candlestick to ensure that the bearish signal is vapd. A strong bearish candle following the Gravestone Doji is a key confirmation that the market is reversing and the uptrend may be over.
✅ Volume: Consider the volume along with the Gravestone Doji. Higher volume on the Gravestone Doji and subsequent bearish candles increases the repabipty of the signal.
✅ Trend Context: The Gravestone Doji is a stronger reversal signal when it appears at the top of an uptrend. It suggests that after a period of strong buying, the sellers are gaining control. If it appears in a downtrend or sideways market, its significance might be less repable.
✅ Follow-through: Always look for confirmation after the Gravestone Doji. The next candlestick should close lower for the signal to be more repable as a bearish reversal.
The Gravestone Doji is a bearish reversal candlestick pattern that signifies a loss of momentum in an uptrend. It shows that while there was a strong effort by the buyers to push the price higher during the trading session, the sellers ultimately took control, pushing the price back down to close near the low of the session. This pattern suggests that the uptrend may be coming to an end, and a downtrend could follow.
If you're looking to spot potential trend reversals in an uptrend, the Gravestone Doji can be a useful tool, especially when confirmed by the next bearish candlestick.