Gravestone Doji
A Gravestone Doji is a type of candlestick pattern that is used in technical analysis to indicate a potential reversal in the current trend. The pattern is formed when the opening and closing prices of a security are equal, and the low of the day is lower than the open and close. The pattern is named for its resemblance to a gravestone, with the open and close forming the top of the gravestone and the low forming the base.
The Gravestone Doji is a bearish reversal pattern, indicating that the current trend may be coming to an end. It is typically seen at the top of an uptrend, signaling that the buyers are losing control and the sellers are beginning to take over. The pattern is considered to be more reliable when it appears after a long uptrend, as it indicates that the buyers have been unable to push the price higher.
The Gravestone Doji is a relatively rare pattern, and is often seen as a sign of a potential reversal. Traders should be aware that the pattern is not always reliable, and should be used in conjunction with other technical indicators to confirm the reversal. Additionally, traders should be aware that the pattern can also be seen at the bottom of a downtrend, indicating that the sellers are losing control and the buyers are beginning to take over.
History of the Gravestone Doji
The Gravestone Doji is a relatively new pattern, having only been identified in the late 20th century. It was first described by Steve Nison in his book, Japanese Candlestick Charting Techniques. Nison noted that the pattern was often seen at the top of an uptrend, and was a reliable indicator of a potential reversal.
Since then, the Gravestone Doji has become a popular pattern among technical analysts. It is often used in conjunction with other technical indicators to confirm a potential reversal in the current trend. Additionally, traders often use the pattern to identify potential entry and exit points in the market.
Table of Comparisons
| Pattern | Reversal | Reliability |
|---|---|---|
| Gravestone Doji | Bearish | High |
| Hammer | Bullish | Medium |
| Shooting Star | Bearish | Medium |
Summary
The Gravestone Doji is a type of candlestick pattern that is used in technical analysis to indicate a potential reversal in the current trend. The pattern is formed when the opening and closing prices of a security are equal, and the low of the day is lower than the open and close. The pattern is considered to be more reliable when it appears after a long uptrend, as it indicates that the buyers have been unable to push the price higher.
For more information about the Gravestone Doji, traders can visit websites such as Investopedia, TradingView, and StockCharts.com.
See Also
- Hammer
- Shooting Star
- Doji
- Engulfing Pattern
- Harami
- Dark Cloud Cover
- Piercing Line
- Morning Star
- Evening Star
- Hanging Man
