Gravestone Doji

Gravestone Doji for NinjaTrader 8

A Gravestone Doji is a one bar price action pattern that shows up when prices have advanced significantly, but then fall to close near the open. Therefore, a large upper shadow will form, significantly larger than the candle body, indicating price rejection.

What is a Gravestone Doji

A Gravestone Doji is a more restrictive version of the shooting star pattern. It has a long upper shadow, little or no lower shadow and a doji forming near the bar low. A Gravestone Doji is therefore a pattern that forms when prices advance significantly, but then retreats to close near the initial open.

Defined as a reversal pattern, a Gravestone Doji will appear during uptrends, the prior being an up-close or a small body bar. An internal Swing Trend for the candlestick indicator determines the market bias. The deviation type, multiplier and swing strength requirement is user selectable via the indicator dialogue box. For the swing strength, the current bar’s low will mark a new N bar low, by default set to 5. Likewise, the upper shadow is set to be x times larger than the body size and the lower shadow, by default a factor of 3. The bullish equivalent to this pattern is the Dragonfly Doji.

Being a one bar pattern, thesepatterns are not particularly reliable when used without additional confirmation. Statistical expectancy may be improved by combining with certain trend filters, such as a moving average. An example showing how to combine additional technical indicators with candlestick patterns available here.

Other bearish candlestick patterns

Other bearish candlestick patterns include the bearish belthold, bearish engulfing, bearish harami, bearish harami cross, black marubozu, dark cloud cover, hanging man, evening star, evening doji star, long black candle, shooting star, tweezers top, three black crows and the falling three methods.

TheGravestone Doji and the above patterns may be identified with our candlestick pattern indicator for NinjaTrader 8. Check out the LizardIndicators Premium Section for more information.