Dragonfly Doji
bullish reversal signal · 1 candle · reliability 3/5
A doji with a long lower wick: sellers pushed price down, but buyers drove it back to the open by the close.
The Dragonfly Doji is a special doji variant: the open and close are at the period high, with only a long lower wick. Its shape resembles a dragonfly in flight. The message is that sellers pushed price sharply lower early in the period, but buyers drove it all the way back to the starting point. At the end of a downtrend, it can signal a bullish reversal; higher in the range, it is less reliable.
What does it signal? A doji variant with a long lower wick and almost no body — sellers pushed price much lower, but buyers brought it all the way back to the open. It reflects strong reversal pressure.
When is it reliable? At the end of a downtrend, at a support level — the long wick shows that buyers defended the area. High volume during the wick is ideal.
When to avoid it? In sideways markets or in the middle of an uptrend — in those cases the shape signals indecision, not reversal. Avoid trading it near major news events such as rate decisions or earnings.
Anatomy and identification rules
Candle anatomy
- 1
Open and close are practically identical — a horizontal line at the top
- 2
Long lower wick — at least 70% of the candle’s full height
- 3
No upper wick, or only a minimal one
- 4
The shape resembles an upside-down T
Identification rules
- The body is no more than 3% of the full candle height
- The lower wick is at least 70% of the full candle height
- The upper wick is no more than twice the size of the body
- It is a bullish signal only at the end of a downtrend
- The next candle needs to confirm the signal
Pattern in chart context
What it says about the market
Context of appearance: At the end of a downtrend, near an important support level. It is also common as a reaction to news, and high volume strengthens the signal.
Market psychology in three steps
- 1
Panic Selling. During the period, sellers hit price hard — the move looks panic-driven, and buyers are initially absent.
- 2
Buyers Step In. At a certain level, buyers gather — the long lower wick shows serious interest there. Selling pressure starts to fade.
- 3
Close at the Open. By the end of the period, price returns to the opening level — buyers have taken full control. A reversal becomes likely.
Same shape, opposite meaning
The Dragonfly Doji and the Gravestone Doji look identical. The difference lies in context — mistake one for the other and you enter in the opposite direction. The candle shape alone is never enough: always read the trend first, then the pattern.
Most common mistakes
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Wick Length. A strong Dragonfly Doji has a lower wick at least 2× the size of the body, ideally 3×. A shorter wick is a weaker signal and closer to a plain doji.
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Ignoring Context. The Dragonfly Doji works best at the end of a downtrend or near support. In an uptrend, a similar shape is an indecision pause, not an entry point.
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Entering at the Doji Body. After the pattern closes, wait for confirmation — the close of the next green candle is the entry point. Early entries produce many false signals.
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Ignoring Volume. A long wick without volume is a weak signal. Ideally, volume is above average during the wick — that shows real demand at support.