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Dragonfly doji candlestick pattern

Dragonfly doji candlestick pattern : Dragonfly Doji candlestick will occur when the opening and closing price is at the same level but a long lower wick. It is the same as bullish Doji means when the market opens the sellers come in and push the price lower. It is not long before the buyers take control and fight their way back higher. It acts as an indication of investor indecision and a possible trend reversal. It will occur when the market trades down and reverses but does not move above the opening price. The dragonfly candle is considering a reliable indication of a trend reversal. It has no real body and a long downward shadow. Dragonfly candle will suggest an aggressive selling but strong buying force to bring the closing price up to the opening price. It appears during uptrend or downtrend with different meanings. It confirms the presence of sellers in the market but the downtrend gets invalidated by strong buying pulls. It is a candle reversal pattern that forms after a bullish or bearish trend.

Limitations of Using the Dragonfly Doji

No assurance is given at the price that will continue in the expected direction of the confirmation candle. Traders will need to find other locations for stop-loss that may not justify the potential reward of the trade. The candlestick patterns, indicators are required to exit the trade when it is profitable.