DOJI DRAGON FLY CANDLESTICK

A Dragonfly Doji is a sort of candlestick pattern that, based on prior price activity, might indicate a future price reversal to the downside or upside. When the asset's high, open, and close prices are all the same, it forms a Dragonfly Doji. The extended bottom shadow indicates that intense selling occurred over the candle's lifetime, but the fact that the price closed around the open indicates that buyers were able to absorb the selling and bring the price back up.

The pattern's psychology is similar to that of other doji candles. The dragonfly opens at or around the day's peak, then drops, leaving a lengthy lower shadow. The bears strive all day to keep the price below, but the bulls bounce off the bottom and return to the surface, ending the day where they started, at or near the opening price.

When the open, high, and closing prices are almost equal, the Dragon fly Doji chart pattern is formed. The lengthy lower shadow is the most crucial component of the Dragon Fly Doji.

Consider the following factors to determine whether the candlestick is a 'Dragon Fly Doji.'

• The Dragon Fly Doji is an 'T'-shaped candlestick.
• The price opens and closes at the daily high or fairly close to it.
• The lower shadow should be long.
• Ignore the body color of doji, although green-bodied doji perform better than red-bodied doji.

The dragonfly candlestick, which appears after a downturn, may indicate that a price increase is on the way. Following an upswing, it indicates that additional selling is entering the market, which might lead to a price decrease. The candle that follows the dragonfly doji must indicate the direction in both circumstances.

The dragonfly doji pattern doesn't appear very often, but when it does, it's a hint that the trend is about to shift. The dragonfly's lengthy lower shadow after a price gain indicates that sellers were able to seize control for at least part of the period. While the price remained steady at the conclusion of the time, the rise in selling pressure is a red flag.

The dragonfly candlestick, which appears after a downturn, may indicate that a price increase is on the way. Following an upswing, it indicates that additional selling is entering the market, which might lead to a price decrease. The candle that follows the dragonfly doji must indicate the direction in both circumstances.

• Doji with green bodies perform better than red ones.
• Before acting on the dragonfly doji, most candlestick traders wait for the confirmation candle.