Gravestone Doji is a Japanese candlestick pattern that signals a major market reversal, like a warning bell for savvy traders!
The striking shape of the pattern: it resembles a gravestone, having a long upper shadow while the price closes near its lowest point, as if buyers tried to push up but sellers crushed them!
The strong message of the pattern: when it appears after a long uptrend, it is a warning cry that the bullish trend may sharply reverse downward.
The struggle between bulls and bears: the long shadow reveals that buyers pushed the price higher, but sellers forced it back down, indicating weakness in demand.
Context is key: the pattern is more powerful if it appears at a major resistance or after a long upward wave.
Confirmation is essential: don’t jump in immediately! Wait for a bearish candle afterward or a break below a support level to increase confidence in the signal.
How to benefit from it? You can enter a sell trade when the lowest price of the Doji candle is broken, placing a stop-loss above its peak.
Beware of traps! Sometimes the pattern can be misleading if the overall trend is strong, so use it with other indicators like RSI or moving averages.
An exciting history: the origins of this pattern trace back to Japanese rice traders who noticed how these candles formed precise warnings about market reversals!
Suitable for any market: whether you are trading stocks, currencies, or commodities, Gravestone Doji acts as a strong signal across all timeframes
