Dragonfly Doji: The Bullish Doji That Rejects the Lows

The standard doji says "nobody won." The dragonfly doji says something more specific: "sellers tried hard to take price down — and buyers rejected every bit of it."

The result is a candle with a long lower wick and no upper wick, with the open and close at or near the session high. It looks like the letter "T."

---

---

What Is the Dragonfly Doji?

The dragonfly doji is a variant of the standard doji where all session activity happens below the open/close price. Sellers drove price down during the session, but buyers absorbed every bit of that selling and closed the candle at the very top of the range.

Formation rules:

• Open ≈ Close ≈ Session High (within 1–3% of the top of range)
• Long lower shadow — at least 2–3× the range of the upper body portion
• No upper shadow (or negligible)

It shares DNA with the hammer — both show rejection of lower prices. The difference: the dragonfly doji has an open equal to the close (pure equilibrium at the highs), while the hammer can have a small but discernible body.

Strength rating: 60/100 — bullish-leaning with proper context.

---

The Psychology

Sellers controlled the early session. Price dropped — sometimes sharply. But buyers didn't let it stay down. They absorbed the selling continuously through the session and brought price all the way back to where it opened — and kept it there.

The fact that the close equals the session high means no sellers successfully "held" gains. Every bear who shorted during the session was underwater by the close. That's a powerful statement about buyer conviction at those lows.

---

What It Means Based on Position

At the Bottom of a Downtrend — Highest Conviction

After price has been falling, a dragonfly doji shows that bears made their best effort and buyers completely neutralized it. The long wick represents the full extent of seller aggression — and the rejection of every bit of it.

This is the strongest context for the dragonfly doji. Especially if the wick reaches a prior support level or a round-number price, the message is clear: buyers are here at these prices.

Confirmation: wait for the next candle to open and hold above the dragonfly's open/close level.

Near a Key Support Level — Strong Signal

A dragonfly doji that forms exactly on a major support area — and the lower wick dips briefly below it then recovers — is a "support held" signal with unusual clarity. The long wick shows the brief breach; the close at the top shows it was immediately bought back.

This is one of the cleanest support-confirmation patterns in candlestick analysis.

At the Top of an Uptrend — Proceed Cautiously

At the top of a rally, a dragonfly doji means something different. The lower wick shows that sellers tried to bring price down — and even though buyers won the session, the mere existence of that selling pressure at highs is notable.

It doesn't confirm a reversal, but it does suggest: "watch the next few sessions carefully." If followed by a bearish candle, reassess longs.

---

How to Trade the Dragonfly Doji

Entry: On confirmation — the next bullish candle that opens and holds above the dragonfly's open/close price. More aggressive traders enter on the dragonfly's close itself.

Stop loss: Below the low of the dragonfly's lower shadow. If price returns there, buyers have lost the battle they appeared to win.

Take profit: Nearest resistance above, previous swing high, or a measured move equal to the dragonfly's total range.

Volume: A dragonfly doji on high volume — especially where the volume came in during the lower wick portion — indicates real, significant buying at the lows. This substantially increases reliability.

---