The Gravestone Doji Candlestick Pattern: Spot Bearish Reversals with Confidence
Sometimes, price charts give subtle warnings that a change may be on the horizon. One such clue is the gravestone doji candlestick pattern—a spooky name, yes, but a helpful signal when the market is losing steam. This guide will walk you through what a Gravestone Doji looks like, what it suggests, when it’s most powerful, and how traders use it to anticipate potential reversals. If you’re still learning how to read charts, don’t worry—this pattern is easy to recognize and surprisingly informative.
What the Gravestone Doji Looks Like
The shape that tells a story
The gravestone doji forms when the market opens at a price, pushes much higher during the session, but then drops back down—closing right where it started. What’s left behind is a candlestick with a long upper wick, no real body, and little to no lower shadow.
This shape tells us something very specific: buyers tried to take control, but sellers completely erased those gains by the close. That kind of rejection can often point to a possible bearish reversal—especially after an uptrend.
Other Doji types—like the Dragonfly, standard Doji, and Long-Legged Doji—exist too, but we’ll keep the spotlight here on the Gravestone.
Why the Gravestone Doji Matters
What it suggests about the market
The gravestone doji candlestick pattern is all about rejection. It’s a moment where the bulls had their shot, but the bears came back stronger. When this candle forms near a resistance level or at the top of a rally, it can be a strong sign that momentum is fading.
That’s why many traders use it as an early warning that the trend may be reversing. However, just like with most candlestick patterns, it’s smart to wait for the next candle to confirm that a shift is really happening.
When to Pay Close Attention to a Gravestone Doji
Context makes all the difference
The same pattern can mean different things depending on where it shows up.
So, let’s look at a few situations where the Gravestone Doji could be more meaningful:
When you combine this pattern with other tools, like trendlines or indicators, it becomes even more useful. Alone, it’s a warning. With confirmation, it’s a signal.
How Traders React to a Gravestone Doji
Turning a clue into a setup
Let’s talk strategy—because spotting the pattern is only the beginning. Once you see a Gravestone Doji, here’s how many traders respond:
- Spot it at the top of a strong move or right under resistance.
- Wait for confirmation from the next candle. A bearish candle with a lower close often seals the deal.
- Use extra signals like RSI (if it’s overbought) or MACD divergence to back up the setup.
Here’s a quick way to remember the approach:
Real Example: Gravestone Doji
Let’s imagine the NASDAQ 100 has been climbing all week. On Friday, price opens strong and surges higher—only to fall all the way back down by the end of the day. The candle forms a perfect gravestone doji candlestick pattern.
By Monday, a large red candle forms, closing lower than Friday’s open. This confirms the reversal. Traders who recognized the Doji, waited for confirmation, and entered short could’ve captured a solid pullback.
The gravestone doji candlestick pattern is a simple but powerful signal of buyer exhaustion. It’s not a magic predictor, but when it appears after a strong rally—especially with confirmation—it can help you spot potential turning points before they happen.
Once you’re familiar with this one, you’ll start seeing it pop up in some pretty interesting places.
Next up, get to know its opposite: the Long-Legged Doji, where confusion reaches a whole new level.