Trading Education Guides Candlesticks
- By Angelica Rieder
- Updated April 4, 2024
7 min read
- Reviewed by Bullish Bears
- Fact checked by Lucien Bechard
SHARE THIS ARTICLE
Dragonfly doji candlesticks are reversal candlesticks found at the bottom of downtrends. They are shaped like a T and signal a potential reversal to a new uptrend. They have a long shadow and almost no upper body. Enter trade long on the break above the top of the candle.
Candlesticks eBook & Wallpapers
Price action is the most important indicator to learn when trading. It shows what's happening real time. Our free eBook covers the most popular patterns and how to trade them. Custom-made desktop wallpapers included.
Get eBook
Table of Contents
- Dragonfly Doji Candlestick Meaning
- Basics
- What It Tells You
- Dragonfly Doji Candlestick Trading Strategy
- Technical Analysis
- Dragonfly Doji Candlestick Example
- Dragonfly Doji Fakeout
- $MSFT Uptrend Example
- Final Thoughts
- Frequently Asked Questions
Dragonfly Doji Candlestick Meaning
Dragonfly doji candlesticks are indecision candlesticks and are not as common as other patterns. However, they are part of the doji family. They look like a T with a long lower shadow and no upper wick. Many times, they are black or neutral on stock charts.
The dragonfly doji candlestick is a more difficult pattern to find. These candlesticks tell a story, whether alone or together with a group.
This is an example of a dragonfly doji. Traders would take a long entry on the bullish candlestick that breaks above the dragonfly. They would place their stop loss on a bearish candlestick close below the base of the dragonfly. You’ll notice that this pattern also looks like a hammer but with a smaller real body. They are especially effective when found at the bottom of a downtrend signaling a bullish reversal.
Basics
Candlesticks have 4 data entries that form them. Dragonfly doji candlesticks form when the opening, high of the day, and closing are all the same, but the day’s low creates a long shadow. As a result, they look like a T.
It has a long lower wick but no top wick. This tells that there were a lot of sellers for most of the day. As a result, buyers came in at the end of the day and pushed the price back up. The price returns to the day’s high, forming the T shape. These indecision candlesticks show signs of a reversal.
What It Tells You
Dragonfly doji candlesticks show a reversal. However, the implications of said reversal depend on price action and confirmation.
The long wick shows evidence of buying pressure. There is that long tail, though, so sellers are also abundant. They are much harder to find but are reliable reversal signs within a defined trend.
Sometimes, the stock price doesn’t show its value because it has fallen so low. The bulls see that and return to buy, increasing the price. It’s all about supply and demand. When the price heads back up to the near-high close, dragonfly tells you, demand is starting to outweigh the supply.
COURSE |  |  |  |
|---|---|---|---|
| DESCRIPTION | Learn how to read penny stock charts, premarket preparation, target buy and sell zones, scan for stocks to trade, and get ready for live day trading action | Learn how to buy and sell options, assignment options, implement vertical spreads, and the most popular strategies, and prepare for live options trading | How to read futures charts, margin requirements, learn the COT report, indicators, and the most popular trading strategies, and prepare for live futures trading |
| INCLUDED | Daily watch lists • Trade rooms • Trading scanners • Discord • Live streaming Day Trading > | Daily watch lists • Trade rooms • Options scanners • Discord • Live streaming Options > | Futures target levels • Trade rooms • Real time teaching • Discord • Live streaming Futures > |
Dragonfly Doji Candlestick Trading Strategy
- Traders take a long position when the price breaks above the candlestick’s high.
- They use a candlestick close below the low as a stop level.
- They might take a shot at the break of the low and use a candlestick close above high as a stop.
Technical Analysis
A dragonfly doji candlestick pattern used with technical analysis can be powerful. These candlesticks form around support and resistance depending on the stock trend. These are indecision candles that help confirm reversals.
Reversals usually happen when a stock hits support or resistance and does not break. That’s why you need to know technicals. For example, you can use moving average lines like the simple moving average or VWAP to guide support and resistance.
Real bodies of candlesticks and wicks are also commonly used to find support and resistance. After a downtrend, when they are found at the support, this can signal a bullish reversal.
This can signal a bearish reversal after an uptrend when found at resistance. Again, candlesticks and moving averages are vital to support and resistance.
Dragonfly Doji Candlestick Example
This is a 15-minute Dragonfly reversal on $MSFT. The stock gained several percent after. The pattern developed at the base of a bull flag pattern, which looked like a falling wedge. When the reversal took place, it turned into a rising wedge pattern. It also looked like a cup and handle pattern. You could also see the right shoulder of an inverse head and shoulders pattern.
Dragonfly Doji Fakeout
This is an example of a brief dragonfly fakeout. You’ll notice that the price briefly increased, forming a gravestone doji candlestick. This could have gotten the bulls to cover their positions. However, the candle didn’t close below the dragonfly. The next candle was a bullish spinning top candlestick that continued the uptrend. Take note of the double bottom formation as well.
$MSFT Uptrend Example
The picture above is a daily chart of $MSFT. The highlighted candle looks very close to a dragonfly doji but had a little upper wick. This could be called a longe legged doji. Even though this isn’t technically a dragonfly it tells a similar story, however, this is an example that is found during an uptrend.
You’ll notice that this dragonfly candle happened at the apex point of the preceding rising wedge pattern. This is a bearish single that the bulls were losing steam. After the candle formed price went into a bearish megaphone pattern. However, this was a temporary pullback and was consolidation that turned into a bull flag breakout and continuation of the bullish trend.
Final Thoughts
Dragonfly doji candlesticks are a popular bullish reversal candlestick. They are most effective when found at the base of a downtrend. You’ll also see them in upgrades commonly found in pullback areas that form flags and pennants that break out and continue the bullish trends. The benefit of these patterns is that they provide traders with clearly defined stop loss levels, which is important to have as a trader.
Frequently Asked Questions
Is a Dragonfly Doji Candlestick Bullish or Bearish?
A dragonfly doji candlestick is typically a bullish candlestick reversal pattern found at the bottom of downtrends. They look like a hammer candlestick but have much thinner real bodies. They are also found at support levels signifying a reversal to the bullish upside.
What Does a Dragonfly Doji Indicate?
A dragonfly doji indicates a bullish reversal pattern. It looks like a hammer pattern and signals that support is holding and the price is about to reverse to the bullish side.
What Is the Success Rate of the Dragon Fly Doji?
The dragonfly doji has a 55.3% success rate, depending on the setup. It's a smaller reversal candle, and the success of the pattern depends on the strength of the bullish pattern after the reversal.
Related Articles
H Pattern
February 28, 2024
There are many stock chart patterns to behold, but one that appears from time to time is an “h” pattern. This pattern usually emerges after
Read More »
How to Trade 3 Bar Reversal Pattern
October 30, 2020
Have you heard of the 3 bar reversal pattern? If you’re looking for a pure price action pattern that’s a surefire way to make money,
Read More »
How to Trade Heikin Ashi Candles
March 17, 2020
Have you ever wondered, “What is heikin ashi”? You’re in good company; I had no idea until I started trading. I found out a few
Read More »
Free Candlestick Cheat Sheet
January 25, 2019
A candlestick cheat sheet is a great tool to have when you’re a new trader. Even experienced traders can benefit from having a candlestick cheat
Read More »
How to Trade a Megaphone Pattern
October 18, 2018
The megaphone pattern is another chart pattern used for technical analysis. This is one of my favorite patterns because there is usually a lot of
Read More »
Candlesticks
H Pattern
Read More »
Angelica Rieder February 28, 2024
Candlesticks
How to Trade 3 Bar Reversal Pattern
Read More »
Bullish Bears April 15, 2024
Candlesticks
How to Trade Heikin Ashi Candles
Read More »
Angelica Rieder April 4, 2024
Candlesticks
Free Candlestick Cheat Sheet
Read More »
Angelica Rieder April 4, 2024
Free Trading Courses
Enroll Now
Get Your Free Trading Courses
- We want to teach you
- Learn day trading, swing trading, options, futures, and price action
- Rated Best Value Courses by Investopedia
STOCK TRADING SERVICE
Our chat rooms willprovide you with an opportunity to learn how to trade stocks, options, and futures. You’ll see how other members are doing it, share charts, share ideas and gain knowledge.
Our traders support each other with knowledge and feedback. People come here to learn, hang out, practice, trade stocks, and more. Our trade rooms are a great place to get live group mentoring and training.
TRADE ALERTS “SIGNALS”
The Bullish Bears trade alerts include both day trade and swing trade alert signals. These are stocks that we post daily in our Discord for our community members.
These alert signals go along with our stock watch lists. Our watch lists and alert signals are great for your trading education and learning experience.
We want you to see what we see and begin to spot trade setups yourself.
REAL-TIME STOCK ALERTS SERVICE
We also offer real-time stock alerts for those that want to follow our options trades. You have the option to trade stocks instead of going the options trading route if you wish.
Our stock alerts are simple to follow and easy to implement. We post entries and exits.
Also, we provide you with free options courses that teach you how to implement our trades as well.
STOCK TRAINING DOESN’T NEED TO BE HARD
Stock training doesn’t need to be hard. But it sure feels hard when you don’t know where to turn for legitimate knowledge. There are tons of places to learn, but what makes us different?
Well, for starters, we’re just real everyday people who like trade stocks. We’re not gurus portraying a fancy lifestyle of cars and jets and beaches. Can you obtain those things with what we teach you? Sure you can. Is that what motivates us when teaching you how to trade?
Nope. What we really care about is helping you, and seeing you succeed as a trader. We want the everyday person to get the kind of training in the stock market we would have wanted when we started out.
WHY WE’RE DIFFERENT
What else makes us different? When it comes to the stock market, we’ve won, we’ve lost, we’ve lived, and learned. We’ve been through the ups and downs in the market and figured out what really matters. The Charts…Candlesticks = PRICE ACTION! We’ve created a site that passes all this knowledge on to you.
We don’t charge you an arm and a leg for the stock training we give you. We charge a modest amount that goes towards running our day-to-day operations and paying for our invaluable team moderators that are passionate about teaching YOU!
That’s about it. We could charge more, but we have a pay it forward, give back mentality. It’s not about the money. The best and most important thing for us is YOU. We want to feel good about what we do, and the results and reviews speak for themselves.
Those emails we get, the feedback, the success we see. That is what our educational trading community is all about. We hold no secrets back. Our trading edge is your trading edge.
STOCK TRAINING DONE RIGHT
We don’t care what your motivation is to get training in the stock market. If it’s money and wealth for material things, money to travel and build memories, or paying for your child’s education, it’s all good. We know that you’ll walk away from a stronger, more confident, and street-wise trader.
In our stock trading community, you’re going to get it all. Futures, options trading, and stocks. Not just penny stocks either. Small, mid, and large caps. Each day we have several live streamers showing you the ropes, and talking the community though the action.
There’s no catch, no smoke or mirrors. What you see is what you get. If you’re looking to change your life, or someone else’s, we’re here to help you reach that goal. Get started learning day trading, swing trading, options, or futures trading today!
Click Hereto start your 7-day free trial.
TRADING STOCKS IN THE BULLISH BEARS COMMUNITY
Yes, we work hard every day to teach day trading, swing trading, options futures, scalping, and all that fun trading stuff. But we also like to teach you what’s beneath the Foundation of the stock market.
Tell you the TRUTH about how the market works. The importance of controlling your emotions and having a proper mindset when trading. We’re really passionate about teaching you this stuff!
Money isn’t our #1 priority in life. YOU are. Our members come first. Making sure you get comfortable with trading is our priority.
We have members that come from all walks of life and from all over the world. We love the diversity of people, just like we like diversity in trading styles. It creates an environment much like a university or college.
TRADING ROOMS AND LIVE STOCK TRAINING
Each day our team does live streaming where we focus on real-time group mentoring, coaching, and stock training. We teach day trading stocks, options or futures, as well as swing trading. Our live streams are a great way to learn in a real-world environment, without the pressure and noise of trying to do it all yourself or listening to “Talking Heads” on social media or tv.
We will help to challenge your ideas, skills, and perceptions of the stock market. You will learn and grow as a trader. Every day people join our community and we welcome them with open arms. We are much more than just a place to learn how to trade stocks.
Feel free to ask questions of other members of our trading community. The Bullish Bears are a very helpful crew. We realize that everyone was once a new trader and needs help along the way on their trading journey and that’s what we’re here for. To give you a hand up along your trading journey.
Click Hereto try our trading community free for 7 days.
FREE ONLINE TRADING COURSES
If you’ve looked for trading education elsewhere then you’ll notice that it can be very costly.
We are opposed to charging ridiculous amounts to access experience and quality information.
That being said, our website is a great resource for traders or investors of all levels to learn about day trading stocks, futures, and options. Swing trading too!
On our site, you will find thousands of dollars worth of free online trading courses, tutorials, and reviews.
We put all of the tools available to traders to the test and give you first-hand experience in stock trading you won’t find elsewhere.
Our content is packed with the essential knowledge that’s needed to help you to become a successful trader.
It’s important to treat day trading stocks, options, futures, and swing trading like you would with getting a professional degree, a new trade, or starting any new career.
Invest the proper time into your Trading Education and don’t try to run before you learn to crawl. Trading stocks is not a get-rich-quick scheme. It’s not gambling either, though there are people who treat it this way. Don’t be that person!
STOCK TRADING COURSES FOR BEGINNERS
The Bullish Bears team focuses on keeping things as simple as possible in our online trading courses and chat rooms. We provide our members with courses of all different trading levels and topics.
If you’re a beginner, intermediate level, or looking for expert trading knowledge…we’ve got you covered.
We have a basic stock trading course, swing trading course, 2 day trading courses, 2 options courses, 2 candlesticks courses, and broker courses to help you get started. Free.
Just choose the course level that you’re most interested in and get started on the right path now. Become a leader, not a follower. When you’re ready you can join our chat rooms and access our Next Level training library. No rush. We’re here to help.
Click Hereto take our free courses.
