Trading term

What is Dragonfly doji?

A dragonfly doji is a candle whose open, close and high all sit at the top of its range, leaving a long lower wick and no upper one. Sellers drove price down during the period and buyers recovered all of it.

Like every doji, the open and close are effectively equal. What makes it a dragonfly is that the shared price sits at the candle's high, so the shape is a T: a long tail hanging below a flat top with no upper wick to speak of.

The interpretation is failed selling. Sellers had the whole period to press their advantage, took price substantially lower, and by the close had nothing to show for it — every one of those lower prices was bought. Appearing after a decline or at a support level, that is read as a sign the selling pressure has been absorbed.

It is the mirror image of the gravestone doji, and it shares a shape with the hammer. The distinction is that a hammer has a small real body while a true dragonfly has essentially none — open and close are the same price. In practice traders treat them as the same message with slightly different degrees of conviction.

The mirror image at a bottom

Open, close and high all sit at the top while price plunged to $20.60 and recovered completely. Sellers had the period and finished with nothing to show for it.

For example

After four down sessions a stock opens at $24.05, collapses to $20.60 intraday, then recovers all afternoon to close at $24.10 — level with its high. The candle is almost entirely lower wick, and price climbs to $30 over the following sessions.

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Why it matters to you

The long tail marks the exact price where selling was absorbed, which is both the evidence and the invalidation level. A stop below that wick is tight and unambiguous, and because the pattern only forms when a large intraday move is fully reversed, it flags a genuine change in who is winning rather than a slow drift.

⚠ A dragonfly in a downtrend is not a bottom

The pattern shows selling was absorbed for one period, which in a strong downtrend happens repeatedly on the way down. Buying every dragonfly during a decline is a classic way to catch a falling knife. Wait for the next candle to confirm, and prefer ones that form at a level which already mattered.

Frequently asked questions

What is a dragonfly doji?

It's a candle whose open, close and high are all at the top of the range, leaving a long lower wick and essentially no upper wick. It shows that a sell-off within the period was completely recovered by the close.

Is a dragonfly doji bullish?

It's read as bullish, but its meaning depends on where it forms. After a decline or at a support level it suggests selling has been absorbed. In the middle of a range, or partway down a strong downtrend, it carries little weight on its own.

What's the difference between a dragonfly doji and a hammer?

Almost none in meaning. Both have a long lower wick showing rejected lows. A hammer has a small real body; a true dragonfly has effectively no body at all because the open and close are the same price. The dragonfly is the more extreme version.

How do you confirm a dragonfly doji?

Wait for the following candle to close above the doji's body, which shows the buying continued rather than stopping at the close. The low of the long wick is the natural stop level — below it, the absorbed-selling read is no longer true.