Gravestone Doji candlestick: How to use in trading?

What Is a Gravestone Doji?

The term gravestone doji refers to a bearish indicator commonly used in trading by technical analysts. A gravestone doji is a bearish reversal candlestick pattern that is formed when the open, low, and closing prices are all near each other with a long upper shadow. The long upper shadow suggests that the bullish advance at the beginning of the session was overcome by bears by the end of the session. This often comes just before a longer-term bearish downtrend.

Gravestone Doji

Important point you should note:

• A gravestone doji is pattern that occurs in technical analysis.

• This doji is a bearish pattern that suggests a reversal followed by a downtrend in the price action.

• A gravestone pattern can be used as a sign to take profits on a bullish position or enter a bearish trade.

• The pattern is represented by an inverted T with a long upper shadow.

• The opposite of a gravestone doji is a dragonfly doji.

• The volume bar of the gravestone doji should be always bigger then its previous candle volume bar.

That,s why the candle callsed gravestone doji.

What does a Gravestone Doji mean?

The Gravestone Doji is a bearish Doji, which is observed when the opening and closing price of a security is equal during a trading session. The Gravestone Doji is initiated with an uptrend, which is denoted with a long upper shadow. The Gravestone Doji got its name because the pattern resembles a gravestone with an unusually long shadow pointing upwards.

You can use Gravestone doji candlestick patterns with these type of supply.

wave theory based supply,closing based supply, trendline based supply ,fibonacci retracement based supply.

How is a Gravestone Doji Candlestick Formed?

The Gravestone Doji is a kind of candlestick formed when the opening and closing price of a security in the market is equal, which signifies indecision in the market. The reason it is named a “gravestone” is that the candlestick’s general shape, which has a long upper shadow but no lower shadow, is similar to a gravestone. This can simply be observed at the top of the charts in the form of an inverted ‘T’.

Gravestone Doji

What does Red Gravestone Doji Candlestick tell?

A particular variety of candlestick pattern called the Red Gravestone Doji Candlestick is frequently seen in technical analysis of financial markets like stocks, bonds, and forex. Traders frequently use this candlestick pattern to forecast possible trend reversals or to validate current trends.

The long upper shadow of the Red Gravestone Doji Candlestick is one of its distinguishing features, which is usually at least twice as long as the candlestick’s actual body The candlestick’s actual body, which is tiny and situated close to its lower end, gives the impression that it is a gravestone.