This is called a gravestone doji candle because it looks like a tombstone, hence the name “gravestone doji.”
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What does a gravestone candle signify?
A gravestone candle indicates that the market may reverse when it’s in an uptrend, and after the formation of a gravestone doji candle, the market can potentially move into a downtrend or follow a downward trend.
Definition of Gravestone Doji Candlestick Pattern!
A Gravestone Doji candle is one where bears take its price up from where the stock opens, then sellers bring its price down, even below where it opened, to the point where it closes where it opened. If it closes where it opened, then this type of candle is called a Gravestone Doji. In this, we can see a small shadow towards the low side, which is considered as insignificant, meaning it has no existence. The body of the Gravestone Doji is equal to zero, and it is towards the low side.
How to identify a Gravestone Doji Candle?
In a Gravestone Doji, the low close and open points are very close together, and its shadow should be two to three times larger than its body towards the upper side.
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How does a Gravestone Doji Candle work?
A Gravestone Doji Candle works when it is formed at a resistance level at the top of the market or somewhere in between the market, it doesn’t make any sense, so it is necessary that if a Gravestone Doji is formed in the market, it should be formed at a resistance level at the top of the market where the possibility of reversal is expressed, or it indicates the possibility of a downturn in the market.
How to use Gravestone Doji Candle in trading !
The Gravestone Doji candle appears on the charts of the Candle Market. When the market is in an uptrend, this candle forms at the top of the uptrend’s resistance. After that, if any candlestick pattern, such as a bearish candlestick pattern, forms, we observe that after the Gravestone Doji candle, the formation of a bearish candle implies that the market will show a downward movement.
How to enter the market with a Gravestone Doji candle?
When a Gravestone Doji is formed at the top of the chart, after that, following the formation of any bearish candlestick pattern, we need to enter the market.
How to set a stop loss in a Gravestone Doji candle?
For setting a stop loss in a Gravestone Doji candle, it should be placed at the high of the Gravestone Doji candle.
How to set a target in a Gravestone Doji candle?
We should set the target at three or four times the stop loss we have, otherwise, we need to set the target based on support levels.
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