Dragonfly and Gravestone Doji in Forex: How to Read the Long-Wick Doji

Short answer: A dragonfly doji has its open, high and close at about the same price and a long lower wick. A gravestone doji is the mirror image, with open, low and close together and a long upper wick. Both show a failed push in one direction. Neither is a trade signal until the next candle confirms it.

The two shapes side by side. Illustration, November 2026.

How the two candles are built

Both are variations of the standard doji candle, where the open and close are equal or nearly so. What separates them is where the open and close sit inside the candle’s range.

Feature	Dragonfly doji	Gravestone doji
Open and close	At or near the high	At or near the low
Long wick	Lower	Upper
Other wick	None or tiny	None or tiny
What happened	Price fell, then recovered to the open	Price rose, then fell back to the open
Usual reading	Possible bullish turn after a decline	Possible bearish turn after an advance

“Equal” is loose in practice. On a 1-hour EUR/USD candle that spans 30 pips, an open and close 1 pip apart still count. If the body is 8 or 10 pips, you are looking at a hammer or a shooting star instead.

What a dragonfly says about the session

Picture a 1-hour candle. Sellers dominate early and drive price far below the open. Later buyers take over and carry price all the way back. By the close, nothing has changed on the surface, but the low is now a level where sellers ran out of strength for that hour.

The gravestone tells the same story upside down. Buyers lift price well above the open, then sellers push it back to where the hour began.

That is the whole idea. The wick marks a rejected price. It does not tell you what the next hour will do.

Worked example on EUR/USD

All prices are illustrative, not a forecast.

After several falling candles, a 1-hour candle opens at 1.0850, trades up to 1.0852, drops to 1.0820 and closes at 1.0851.

• Range: 32 pips (1.0820 to 1.0852).
• Body: 1 pip (1.0850 to 1.0851).
• Lower wick: 30 pips.

That is a dragonfly. A trader who waits for confirmation does not buy yet. The next candle closes at 1.0858, above the dragonfly’s high, so the trader buys at 1.0858.

The stop goes below the wick low with a small buffer for the spread: 1.0814, which is 44 pips from entry. With a $5,000 account risking 1% ($50), the pip value needed is $50 ÷ 44 = about $1.14. On EUR/USD with a USD account, 0.11 lot is about $1.10 per pip, so a stop-out costs roughly $48. See the position sizing guide for the method and risk per trade for the 1% figure.

A gravestone works the same way mirrored. Suppose a candle opens at 1.0900, reaches 1.0932, falls to 1.0899 and closes at 1.0901. The upper wick is 31 pips. A trader who waits for the next candle to close below 1.0899 might sell, with the stop above 1.0932 plus a buffer.

Confirmation and what counts

Because the doji itself has no direction, traders ask for a second piece of evidence:

1. The next candle closes past the doji’s other end. For a dragonfly, above its high. For a gravestone, below its low.
2. The candle forms at a known level. A dragonfly at a prior low or at support carries more information than one in empty space.
3. The trend before it was clear. A doji after a straight run says more than one after a sideways drift.

Waiting costs pips. In the example above, the confirmed entry is 7 pips above the dragonfly’s high. Entering at the doji’s close would have given a better price, but with no evidence that the wick means anything.

When the signal fails

• In a strong trend. A dragonfly in a falling market can be a pause. Price may revisit the low in the next candle and keep falling.
• At the weekly open and around data. Wide spreads and sudden moves create long wicks that reflect liquidity, not a shift in sentiment. See news trading and the economic calendar.
• Very small timeframes. On a 1-minute chart, dojis appear all day. Most mean nothing.
• Tiny wicks. A wick of 3 pips on a pair that moves 80 pips a day is not a rejection of anything.
• No stop. The wick low is a natural stop level. If it is so far away that the position size becomes tiny, the setup may not fit your account.

Compare the wick to the pair’s recent range with average true range. A wick that is a large share of the usual daily range is more notable than one that is not.

We have not backtested these patterns and publish no win rate. If you want a figure, test the rules on past charts on a demo account and include costs.

Checklist before acting

1. Is there a clear move into the candle?
2. Is the body close to zero compared with the wick?
3. Is the wick large relative to recent candles?
4. Did the next candle close past the doji’s far end?
5. Where is the stop, and does the position size keep the loss within your limit?
6. Does the spread leave enough room?

A “no” on any of these is a valid reason to skip.

Bottom line

The dragonfly and gravestone doji each show one rejected price level inside a single candle. They are worth noticing at support, resistance or after a clear move, and worth ignoring most other times. Wait for the next close, size the stop beyond the wick, and treat the pattern as one input beside trend and levels. Leveraged trading can lose money quickly, so only risk what you can afford to lose.