Example of How to Use the Dragonfly Doji
Dragonfly dojis are very rare, because it is uncommon for the open, high, and close all to be exactly the same. There are usually slight discrepancies between these three prices. The example below shows a dragonfly doji that occurred during a sideways correction within a longer-term uptrend. The dragonfly doji moves below the recent lows but then is quickly swept higher by the buyers.
Seem this Doji and next higher we go Long on this trend.
Following the dragonfly, the price proceeds higher on the following candle, confirming the price is moving back to the upside. Traders would buy during or shortly after the confirmation candle. A stop-loss can be placed below the low of the dragonfly.
The example shows the flexibility that candlesticks provide. The price wasn't dropping aggressively coming into the dragonfly, but the price still dropped and then was pushed back higher, confirming the price was likely to continue higher. Looking at the overall context, the dragonfly pattern and the confirmation candle signaled that the short-term correction was over and the uptrend was resuming.
Entry 65500-65300
SL Above Doji 65100
TP1 66000
TP2 66900
TP3 Break high.
Dragonfly dojis are very rare, because it is uncommon for the open, high, and close all to be exactly the same. There are usually slight discrepancies between these three prices. The example below shows a dragonfly doji that occurred during a sideways correction within a longer-term uptrend. The dragonfly doji moves below the recent lows but then is quickly swept higher by the buyers.
Seem this Doji and next higher we go Long on this trend.
Following the dragonfly, the price proceeds higher on the following candle, confirming the price is moving back to the upside. Traders would buy during or shortly after the confirmation candle. A stop-loss can be placed below the low of the dragonfly.
The example shows the flexibility that candlesticks provide. The price wasn't dropping aggressively coming into the dragonfly, but the price still dropped and then was pushed back higher, confirming the price was likely to continue higher. Looking at the overall context, the dragonfly pattern and the confirmation candle signaled that the short-term correction was over and the uptrend was resuming.
Entry 65500-65300
SL Above Doji 65100
TP1 66000
TP2 66900
TP3 Break high.
Trade active:
Entry Long now.
with SL and MM
with SL and MM