Free Trading Courses

Gravestone Doji Candlesticks

Gravestone doji candlesticks are reversal candles that are found at the top of an uptrend or near resistance levels. They are shaped like an upside down T with a slim real body and signify a possible reversal to the downside. Look for price to fall below this candle to confirm reversal. 

Table of Contents

What Are Gravestone Doji Candlesticks?

gravestone doji candlesticksGravestone doji candlesticks are a member of the doji family. They are typically found in up trends signifying a potential reversal to the downside. They have a small flat real body, longer upper wick and look like an upside down T. Many of times they are black or a neutral color on stock charts.

Gravestone doji candlesticks make up candlestick patterns and tell a price action story. A “GS” candlestick is a bearish candle. Plain and simple.

This candlestick can be found in bearish trends. However, it’s typically found in a bullish trend that’s about to reverse.

What does a gravestone doji candlestick pattern tell us when stock trading? While they can be found at the end of a down trend, they’re mostly found in an uptrend when a stock is about to reverse.

It’s open price along with the close and low of day are all pretty much near each other. The high of the day creates the long shadow. The gravestone doji candlestick is an upside down T.

That long upper wick tells you the bulls had control throughout the day. Then the bears came in and drove the price back down to end the day, forming the pattern. It shows strong bears during that time frame. You get even stronger confirmation if you find one near a key level of support or resistance.

Similar But Different

It’s important to remember that different dojis can look similar. In fact, they all have that short real body which tells you that day ended in indecision.

Don’t get caught up in trying to determine exactly what the candlestick is. Learn to feel the flow of the candlestick chart without being caught up in the exactness of the candle.

Gravestone Doji BA

What Does It Indicate?

Gravestone doji candlesticks are bearish indecision candles. When a trader sees the gravestone doji pattern, they’re getting out of their trade if they’ve been long the stock or option. The gravestone doji is sending a serious signal to the trader to take their profits or losses and get out.

Comparatively, a trader who was going to go short or buy put options could see this and make that trade. As always the reversal signal of a gravestone doji needs confirmation and depends on price action. If you can’t read the price action, it’s going to cause you lots of headaches. Technical analysis also comes into play and is an important part of a gravestone doji candlestick pattern. 

How to Trade Gravestone Doji Candlesticks

  • Traders take a short at the break of the low and use a close above high as a stop
  • They might take a long position when price breaks above the high of the candlestick
  • Then use a candlestick close below the low as a stop level

Reversal Continuation or Algo

gravestone doji candlesticksIt’s important to know if a pattern is a reversal pattern or a continuation pattern. Gravestone doji candlesticks are typically apart of reversal patterns. But that doesn’t mean you wouldn’t see them in a continuation pattern.

Sometimes you’ll see lots of gravestone dojis on a low volume chart. That is because HFT’s or Algos are trading these stocks while there are no “real” buyers.

Just computers trading with each other on low volume. Don’t fall into these traps! Only buy when volume shows there’s a real presence. So, you need confirmation. You get confirmation by the next few candlesticks as well as moving averages.

Responses

Your email address will not be published. Required fields are marked *

Free online
trading courses

We want to teach YOU how to trade!
Get access to over 10 FREE
Trading Courses!($3,000+ Value)
 

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 Here to take our free courses.