Are Gravestone and Dragonfly Doji reliable?

They are reliable when traded with confirmation (a close beyond the Doji’s extreme) and higher-time-frame context such as support/resistance or supply/demand zones.

Which timeframe works best?

1H, 4H, and Daily timeframes offer cleaner signals. Lower timeframes can work but need stricter filters and wider buffers relative to ATR.

How should I place stops and targets?

Stops typically go beyond the wick with a buffer for spread/volatility. Targets can be prior structure or Fibonacci retracements; many traders take partial profits at 1R and trail the remainder.

What indicators pair well with Doji patterns?

RSI (divergence or 40–50 reclaim), MACD histogram/line rolls, anchored VWAP, and 20/50 EMA confluence are common additions.

Gravestone Doji vs Dragonfly Doji

Gravestone Doji and Dragonfly Doji are two of the most discussed Forex candlestick patterns because they often appear near turning points. Both are single-candle signals with long shadows and a tiny (or nonexistent) real body—but they tell opposite stories about buyer–seller sentiment.

In this guide you’ll learn what each pattern means, how reliable they are, where they work best, and exactly how to trade them with rules, stops, and targets. We’ll also cover context filters (support/resistance, trend, volume), scanning workflows, and a backtesting checklist so you can build a repeatable edge.

Definitions: What Is a Doji?
Gravestone Doji vs Dragonfly Doji (Key Differences)
Candle Psychology & Market Context
How to Identify Each Pattern (Step-by-Step)
Trading Strategies with Confirmation
High-Probability Filters (S/R, Trend, Volume, Momentum)
Common Mistakes to Avoid
How to Scan & Set Alerts Efficiently
Backtesting & Optimization Checklist
FAQs

1) Definitions: What Is a Doji?

A Doji forms when the open and close are nearly equal, showing temporary indecision. The shadow (wick) length tells you who pushed price during the candle.

Gravestone Doji: Long upper shadow, open≈close near the low → buyers drove price up, but sellers overpowered by the close. Often bearish near resistance or after an extended rise.
Dragonfly Doji: Long lower shadow, open≈close near the high → sellers drove price down, but buyers absorbed supply and lifted it back. Often bullish near support or after a selloff.

2) Gravestone Doji vs Dragonfly Doji (Key Differences)

Feature	Gravestone Doji	Dragonfly Doji
Bias	Bearish reversal/continuation (sellers reclaim control)	Bullish reversal/continuation (buyers reclaim control)
Where It Works Best	At/under resistance, supply zones, overbought rallies	At/above support, demand zones, oversold flushes
Confirmation	Bearish close below Doji low or follow-through selling	Bullish close above Doji high or follow-through buying
Stop-loss Idea	Above Doji high (include buffer/spread)	Below Doji low (include buffer/spread)
Targets	Prior swing lows, mid-range, fib 38.2/61.8	Prior swing highs, mid-range, fib 38.2/61.8
Timeframes	1H–Daily for cleaner signals; confirm with HTF	1H–Daily for cleaner signals; confirm with HTF

3) Candle Psychology & Market Context

Why they work: Both patterns show aggressive rejection. In a Gravestone, buyers push up but face strong supply; the failure to hold highs hints at distribution. In a Dragonfly, sellers push down but demand soaks it up; the failure to hold lows hints at accumulation.

Context matters more than the single candle. A Doji in the middle of a range is just noise. A Doji that tags higher-time-frame levels (weekly S/R, trendline, prior swing, round numbers) and then confirms can be a high-quality inflection clue.

4) How to Identify Each Pattern (Step-by-Step)

Find the trend & location: Are you rallying into resistance (look for Gravestone) or selling into support (look for Dragonfly)?
Check the body: Open ≈ Close (the smaller the better).
Shadow test: For Gravestone, long upper wick & tiny/no lower wick. For Dragonfly, long lower wick & tiny/no upper wick.
Volume/volatility: Rejections with increased activity carry more weight.
Wait for confirmation: Next candle should break/close beyond the Doji’s extreme in the expected direction.

Spot Gravestone & Dragonfly Doji quickly with TradingView alerts →

5) Trading Strategies with Confirmation

A) Bearish Strategy: Gravestone Doji at Resistance

Setup: Uptrend into resistance or prior supply; Gravestone forms.
Trigger: Short on close below Doji low, or on retest of the Doji midpoint/level with bearish rejection.
Stop: Above Doji high + buffer (spread/ATR fraction).
Targets: 1) Prior swing low (take partial at 1R), 2) Next demand zone or fib 61.8 of prior rally. Optional trailing via 20-EMA or structure.

B) Bullish Strategy: Dragonfly Doji at Support

Setup: Downtrend or pullback into demand/round number; Dragonfly prints.
Trigger: Long on close above Doji high, or on intrabar retest of the open/close region showing buyers absorbing sells.
Stop: Below Doji low + buffer.
Targets: 1) Prior swing high/structure, 2) Next resistance or fib 61.8 of the downswing; trail if momentum accelerates.

Momentum add-ons: RSI reclaiming 40–50 after Dragonfly, or MACD histogram roll-over after Gravestone, improves odds.

Prefer rule-based assistance? Tools like VIP Indicators can highlight rejection candles, momentum shifts, and confluence so you don’t miss high-quality Doji setups during busy sessions.

6) High-Probability Filters (S/R, Trend, Volume, Momentum)

Structure: Require HTF level: daily/weekly S/R, prior swing, anchored VWAP bands, or trendline confluence.
Trend: For reversals, look for extended legs into level (overbought/oversold). For continuation, use Dragonfly within an uptrend pullback or Gravestone within a downtrend rally.
Volume / Session: London/NY overlap on major FX pairs tends to follow through better.
ATR & Stop Planning: Position size using ATR so the stop clears the wick noise.

7) Common Mistakes to Avoid

Trading the candle in isolation: No context = low edge. Always anchor to levels.
No confirmation: Entering before a close beyond the Doji extreme is a frequent cause of whipsaws.
Stops too tight: Rejection candles often get retested. Place stops beyond the wick with a buffer.
Chasing tiny wicks: If the wick isn’t meaningfully longer than recent candles, the signal’s weaker.

8) How to Scan & Set Alerts Efficiently

Create a watchlist of 12–20 liquid pairs (EUR/USD, GBP/USD, USD/JPY, etc.).
Top-down: Weekly → Daily → 4H to mark S/R zones and trend bias.
Set alerts at your zones and for candle conditions (long upper/lower shadows, RSI crosses, MACD turns).
Save a template labeled “Doji Rejection Play” so execution stays consistent.

Build a Doji scanning workspace on TradingView →

9) Backtesting & Optimization Checklist

Sample size: Minimum 100–200 trades across pairs and conditions.
Locked rules: Entry, stop method (wick+buffer or ATR), confirmation type, targets (fixed 1:2 vs structure).
Metrics: Win rate, average R, max DD, profit factor, longest losing streak.
Variants to test: Require RSI filter? Require session filter? Retest entry vs market close entry?
Forward test: Paper trade 20–30 signals before going live.

Automating execution? A rules-driven EA can help you stick to the playbook. Consider WallStreet Forex Robot 3.0 to systematize tests and remove hesitation. (Automation ≠ guaranteed profits—risk management is still everything.)

10) Gravestone & Dragonfly Doji — Frequently Asked Questions

Are these patterns reliable?

They can be—with confirmation and context. The highest-quality signals occur at clear HTF levels with strong rejection and follow-through on the next candle.

What’s the best timeframe?

1H, 4H, and Daily reduce noise. Lower TFs are tradable but need stricter filters and wider buffers relative to ATR.

Do I need volume for confirmation in Forex?

Spot FX volume is proxy-based, but tick/volatility expansion and session timing still help. On futures/CFDs, rising volume on the rejection adds confidence.

Where should I place stops and targets?

Stops usually go beyond the wick with a small buffer. Targets: first at 1R, then prior structure or Fibonacci retracements. Consider trailing by structure/EMA for runners.

Can I combine Doji with indicators?

Yes. Popular adds: RSI divergence at support (Dragonfly), or RSI failure swing near resistance (Gravestone); MACD histogram rollovers; anchored VWAP bands; 20/50 EMA confluence.

Bottom line: The Doji itself is just a clue. Tie it to location, demand/ supply, and momentum confirmation, and you’ll turn a basic candlestick into a high-probability Forex trading strategy.