In this article, We learn about "Tombstone Doji ".Let's Go!
The Tombstone Doji is a type of Japanese candlestick in which the opening and closing prices of the candles are at the same level or very close to the same level.
A doji candle that opens and closes at or near the lowest price. The candle ends up with a long upper shadow and no body.
If it has a long upper shadow, it indicates a bearish reversal. When it occurs at the top of an uptrend, it is considered a reversal signal.
This pattern is even more bearish than a shooting star.
To identify a tombstone crosshair, look for the following criteria:
- The Tombstone Cross has a long upper shadow but no lower shadow, it resembles an upside down capital letter
To help you remember, think about how a real tombstone is anchored to the ground. The horizontal lines of the tombstone pattern are fixed at the bottom.
This is different from the Dragonfly Doji where the horizontal line is fixed at the top.
The Tombstone Doji is bearish.
The Tombstone Doji indicates that price opened at the session low. There was a sharp intraday rise before prices closed at the session low.
The result is that the opening, lowest and closing prices are all the same (or approximately the same) price.
This candlestick pattern is most noticeable when it occurs after an uptrend , preceded by a bullish candlestick . This suggests that the uptrend may be coming to an end.
Doji stars are trend reversal indicators, especially when they appear following an uptrend or downtrend. A Basic Doji indicates indecision, but a Tombstone Doji means the market has decided to bearish.
When you see a Tombstone Doji candlestick after a strong uptrend, a trend reversal is likely to occur.
Once a Tombstone Doji is identified, a simple strategy is to open a short position below the doji low
Your trade should only trigger the lows of the Doji breakout. If the lows of the Tombstone Doji hold, the price may resume its uptrend.