What is a gravestone doji?

A gravestone doji is pattern that occurs in technical analysis. This doji is a bearish pattern that suggests a reversal followed by a downtrend in the price action. A gravestone pattern can be used as a sign to take profits on a bullish position or enter a bearish trade. The pattern is represented by an inverted T with a long upper shadow.

Are gravestone doji candles a reliable indicator of price reversals?

Research shows that bearish gravestone doji candles are reliable indicators of potential price reversals in trading. These candles suggest that sellers have taken control of the market and are likely to push prices lower in the near future.

Why is a gravestone doji a weak signal?

As the gravestone doji had formed in a downtrend, that means the sellers are in control, therefore for the buyers to enter and try to close the price lower is considered a weak signal too. Tip #3: The colour of the candlestick is irrelevant, it can either be red or green.

Can a trader act on a gravestone doji?

Traders will generally not act on a gravestone doji unless the next candle provides confirmation of a reversal. The first and best way to get a grip on how technical analysis works is to learn about it—read books, take courses both on and offline, talk to other traders, and visit websites that can help teach you some tricks of the trade.