Doji Variants: Long-legged, Dragonfly, and Gravestone Interpretation

A doji is a candle where open and close are nearly equal — indecision. But the three doji variants signal different psychology, and each is tradeable only in the right location.

Long-legged doji (indecision)

A long-legged doji has long wicks on both sides and a tiny body at the center. Both buyers and sellers pushed price, neither won.

• Meaning: acute indecision after a move.
• Tradeable location: only after an extended trend (5+ candles) at a structural level. The long-legged doji there flags a stalled move.
• Entry: wait for the next candle to break the doji's range. Enter in the break direction. Stop: the opposite end of the doji. Target: 1:1 measured move.
• Not tradeable: in the middle of a range. A long-legged doji mid-range is noise — both sides already balanced.

Dragonfly doji (support rejection)

A dragonfly doji has a long lower wick, no upper wick, and a body at the top. Sellers pushed price down; buyers rejected it entirely back to the open.

• Meaning: sellers failed; demand absorbed the push.
• Tradeable location: at support (prior swing low, pivot S1/S2, 20-EMA in an uptrend). This is a bullish reversal signal.
• Entry: on the next candle's break above the dragonfly's high. Stop: 1 tick below the lower wick. Target: the nearest resistance or prior swing high.
• Filter: require the lower wick ≥2× the average candle range. A small-wick dragonfly is weak.

Gravestone doji (resistance rejection)

A gravestone doji has a long upper wick, no lower wick, and a body at the bottom. Buyers pushed price up; sellers rejected it back to the open.

• Meaning: buyers failed; supply absorbed the push.
• Tradeable location: at resistance (prior swing high, pivot R1/R2, overbought RSI). Bearish reversal signal.
• Entry: on the next candle's break below the gravestone's low. Stop: 1 tick above the upper wick. Target: nearest support or prior swing low.
• Filter: upper wick ≥2× average candle range.

Location rules that govern all three

Doji type	Bullish at	Bearish at	Ignore at
Long-legged	Trend exhaustion low	Trend exhaustion high	Mid-range
Dragonfly	Support	—	Mid-range, downtrend continuation
Gravestone	—	Resistance	Mid-range, uptrend continuation

Confirmation and failure

• Never enter on the doji close: doji signal indecision, not direction. Wait for the break of the doji range.
• Volume: a doji on volume ≥1.3× average carries far more weight than one on thin volume.
• Failure: if the next candle gaps through the doji's extreme, the signal failed — exit immediately.

The doji's value is location-dependent. A dragonfly at support is a trade; the same dragonfly mid-range is decoration. Classify the variant, confirm the location, wait for the break.