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A powerful bearish reversal signal with the open, low, and close at the same level - the long upper shadow shows complete rejection of higher prices.
The Gravestone Doji is a single-candle bearish reversal pattern where the open, low, and close are at or very near the same level, with a long upper shadow extending upward. It forms a distinctive inverted "T" shape.
This pattern is essentially a shooting star taken to the extreme - instead of a small body, there's virtually no body at all. The long upper shadow shows that buyers pushed price up significantly during the session, but sellers completely erased all gains by the close.
The Gravestone Doji tells a powerful story of complete rejection of higher prices. During an uptrend, bulls are confident. During this session, they pushed price significantly higher, testing new levels and expecting more gains.
But here's what makes this pattern special: sellers didn't just step in - they completely dominated. By the close, every single tick of advance had been erased. The session ended exactly where it began, with buyers having nothing to show for their efforts.
This total rejection of higher prices sends a strong psychological message: the buying pressure has been exhausted, and sellers are willing to defend this level with full conviction.
Conservative: Enter short on a close below the gravestone doji's low, confirmed by bearish follow-through.
Aggressive: Enter short at the close of the doji if at strong resistance with additional confluence.
Place stop above the high of the upper shadow. The complete rejection of that level is the pattern's strength - if price breaks above, the signal is invalidated.
T1: Previous swing low or nearest support level. T2: Measured move equal to the shadow length projected downward. T3: Use trailing stop on 50% position for extended moves.
Minimum 1:2 R:R required. Gravestone Dojis with longer shadows offer better R:R potential.
A Gravestone Doji is only as good as the context it appears in. The same candle shape can be a high-probability reversal signal or noise - the difference is where it forms and what surrounds it.
The shadow shows where sellers rejected price. Use that level as your stop if going short - if price reclaims it, the pattern failed.
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