Gravestone Doji: Spot Bearish Reversals at Market Tops

What Is Gravestone Doji
 

Single-candle pattern with tiny/no body at bottom, long upper shadow (2-3x body). Open, low, close all at same level. Forms at uptrend peak signaling potential reversal

Pattern Psychology

Buyers push price sharply higher during session. Sellers aggressively reject higher levels, driving price back to opening. Complete rejection of buying pressure signals uptrend exhaustion clearly

Opposite of Dragonfly

Dragonfly Doji (bullish): Long lower shadow, body at top. Gravestone Doji (bearish): Long upper shadow, body at bottom. Mirror images with opposite reversal implications entirely

Trading Strategy
 

Wait for next candle to close below Gravestone's low for confirmation. Enter short positions. Place stop-loss above Gravestone's high. Longer shadow = stronger rejection, better signal reliability

Boost Accuracy

Best at major resistance levels, overbought RSI (>70), or after prolonged uptrends (20+ days). High volume on Gravestone day strengthens signal. Bearish divergence on MACD confirms—70-80% success rate

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