Dragonfly Doji

Similar to the regular Doji candle the Dragonfly Doji candlestick is a single candle bullish reversal pattern that also signals some indecision between buyers and sellers.

Like a Doji candle the Dragonfly Doji occurs when the open and close of a candle is at the same location, giving it a straight line for a body.

The difference with this Doji type is that the open and close occur at the candles high, so the body line is located at the top, usually with a long lower wick. This long lower wick indicates indicates that balance may soon be restored between the bulls and the bears and that demand is beginning to have more weight over supply.

Look for Dragonfly Doji’s at the bottom of downtrends. These Doji’s are fairly common on smaller time frames but their accuracy is suspect with only a 50% bullish reversal accuracy according to Bulkowski’s testing.

The Dragonfly Doji candlestick pattern is rarer on higher time frames, and can most often be found near the top or bottom of a trend. If a Dragonfly Doji appears at the top of an uptrend it is not a Dragonfly but a Northern Doji candle.

The Dragonfly Doji should not be used as a means to enter a trade since it can go up or down just as easily, but it does represent major indecision and so this single candle is worth taking noticing.

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