The Gravestone Doji

The Gravestone Doji is the bearish version of the dragonfly Doji, it is formed when the open and close are the same or about the same price.
What differentiates the Gravestone Doji from the dragonfly Doji is the long upper tail.
The formation of the long upper tail is an indication that the market is testing a powerful supply or resistance area.

See the example below:

The image above illustrates a perfect gravestone Doji. This pattern indicates that while buyers were able to push prices well above the open.
Later in the day sellers overwhelmed the market pushing the price back down.
This is interpreted as a sign that bulls are losing their momentum and the market is ready for a reversal.

See another illustration below:

The chart above shows a gravestone Doji at the top of an uptrend, after a period of strong bullish activity.
The formation of this candlestick pattern indicates that buyers are no longer in control of the market. For this pattern to be reliable, it must occur near a resistance level.

As a trader, you will need additional information about the placement and context of the gravestone Doji to interpret the signal effectively. This is what i will teach you in the next chapters.