Gravestone Doji is a bearish candlestick pattern that signals potential trend reversal, forming when buyers push prices up but sellers drive them back down.
What Is a Gravestone Doji Candlestick Pattern?
A gravestone doji prints when the open and close land basically on top of each other, so the real body is tiny or flat. The giveaway is the long upper wick—often 2–3x the body—showing price pushed higher and then got sold back down.
Ideally there’s little to no lower wick, which means the session never really traded below the open/close area. That inverted “T” look is what traders watch for at resistance: buyers tried to break higher, couldn’t hold it, and sellers took the wheel into the close.
Gravestone Doji vs Dragonfly Doji: Key Differences
Pattern Name | Upper Shadow | Lower Shadow | Body Position | Market Signal | Best Context |
|---|---|---|---|---|---|
Gravestone Doji | Long (2-3x body) | Absent/Minimal | At session low | Bearish reversal | Uptrends/resistance |
Absent/Minimal | Long (2-3x body) | At session high | Bullish reversal | Downtrends/support |
How Does a Gravestone Doji Form During a Session?
Inside the session, the story is pretty clean. Bulls drive price up and print that long upper wick as new highs get tagged. Then sellers step in and fade the move, pushing price back down into the open area.
Buyers may still defend enough to stop a breakdown below the open, but the key point is this: the breakout attempt failed, and the close back at the open shows the bid couldn’t keep control.
What Does a Gravestone Doji Signal About Market Psychology?
At a good resistance level, the upper wick is basically a receipt for trapped late buyers. Price traded higher, found supply, and got rejected hard enough to close back where it started.
That’s why traders treat it as a bearish warning—either a reversal trigger if the trend was stretched, or a continuation signal if it shows up under a bigger downtrend structure after a pullback. The pattern doesn’t “predict” by itself, but it does flag buyer exhaustion and seller presence in a very visible way.
How to Trade the Gravestone Doji: Entries, Stops, Targets
Entry Point Strategy
The standard play is short on a break and close below the gravestone doji’s low. The cleaner version is waiting for that next candle to finish below the low, because it filters a lot of “dip and rip” noise.
If you’re more aggressive, you can enter on the confirmation candle close, but you’re paying for speed with a higher chance of getting wicked out.
Stop Loss Placement Fundamentals
Stops usually go above the high of the pattern—practically, 10–20 pips above the upper wick in FX, or above the wick plus a small buffer in stocks/crypto (think ATR-based). Too tight and you’ll get clipped by a liquidity sweep. Too wide and the trade stops making sense from a risk standpoint.
Exit Strategy and Profit Targets
First target is the nearest obvious support under the setup: prior swing low, demand zone, or a daily pivot. If you prefer rules, a 2:1 reward-to-risk target keeps you honest. Scaling out works well here—take partials into the first support, then let the rest ride toward the next level if momentum stays heavy.
Step-by-Step Gravestone Doji Trading Plan
Spot a gravestone doji into a major resistance zone
Check for “stretch” signals like RSI > 70 or momentum divergence
Wait for the next candle to close below the doji low
Enter short on confirmation
Place stop loss 10–20 pips above the upper wick (or a volatility buffer)
Target the nearest support first
Risk only 1–2% of account equity per trade
After T1 hits, consider moving stop to breakeven or trailing above lower highs
Risk Management Best Practices
Keep sizing boring: risk 1–2% per trade and let the edge play out over a sample size. Respect the stop—if price takes the gravestone high, the rejection failed and you don’t need to “argue” with it.
The pattern works best as part of a stack: level + confirmation candle + volume + momentum context. A trading journal helps too, because your win rate on EUR/USD 1H is going to look different than your win rate on Tesla 5-minute or Bitcoin 4H.
Multi-Market Applicability
You’ll see gravestones in stocks, forex, and crypto because it’s just supply/demand in candle form. The catch is regime: thin liquidity, news spikes, and high-volatility chop will distort the signal, so adjust expectations and buffers to the instrument.
How Do You Confirm a Gravestone Doji Reversal Signal?
Visually, you want a small body sitting near the session low, a long upper wick, and little to no lower wick. That’s what separates it from a spinning top or a regular doji that has wicks on both sides.
Context matters more than the candle: a gravestone doji into an uptrend high or a weekly/monthly resistance shelf is a different animal than the same candle on a noisy 5-minute chart, where it often just marks a quick intraday pullback.
Confirmation is the whole game. Don’t short just because you see the shape. Let the next candle prove it by closing below the gravestone’s low. A follow-through red candle, or a bearish engulfing right after the doji, is even better because it shows sellers are actually pressing, not just rejecting.
Indicators are secondary, but good for confluence. If RSI is above 70, the rejection has a better shot at turning into a real unwind. MACD bearish divergence around the same spot often lines up with the “last push” feel you see in the wick.
Moving averages can help too—if price is rejecting into a cluster like the 20/50/200 EMA zone, that’s often where supply shows up.
Volume helps you separate real selling from a quiet drift. A gravestone doji on above-average volume usually means active distribution. If volume is dead, treat it like a yellow light—those low-participation dojis throw off a lot of fakeouts.
Gravestone Doji Confirmation Checklist
Pattern forms inside an established uptrend (or at least after a strong push up)
Next candle closes below the gravestone low
RSI above 70 (overbought helps, but don’t force it)
Volume above average on the doji or the breakdown candle
Prints into a clean major resistance level (prior swing high, weekly level, VWAP band, etc.)
MACD bearish divergence or bearish crossover nearby
How Reliable Is the Gravestone Doji in Real Trading?
Gravestone dojis get more reliable when the market is already extended and you’re printing right into a level that matters. Best-case combo is: strong uptrend into major resistance, a clear rejection wick, higher volume, and some kind of momentum fade.
Candle color is secondary, but a red close does add weight because it shows sellers didn’t just reject highs—they also took control into the close.
Where they fail: range-bound chop, dead sessions, and random volatility spikes. In a sideways box, gravestones pop up constantly and mean very little because there’s no trend to reverse.
Also, a gravestone in a downtrend is usually not a “buy signal”—most of the time it’s just a pause or a messy retest, so treat contrarian reads with caution.
In practice, you’ll often see the pattern show up at the right shoulder of a head and shoulders or at the second peak of a double top, which is exactly where you want rejection candles to appear. Examples get talked about a lot—like AT&T on an hourly reversal, or the forex resistance gravestone example where the next bearish candle confirmed the breakdown.
The trade logic stays the same: stop above the wick, target into support, and keep the R multiple sensible. If you’re serious about it, use performance analytics to see how it behaves on your ticker, your timeframe, and your session.
Gravestone Doji Mistakes That Cause Losses
Shorting the pattern with no confirmation candle
Ignoring the bigger picture (trend, key levels, macro catalysts)
Trading it in low-volume sessions where wicks lie
Misreading the candle (it’s not a gravestone if the lower wick is meaningful)
Stops that are either too tight (constant whipsaws) or so wide the trade has no edge
Over-leveraging because the setup “looks perfect”
For more examples and deeper pattern breakdowns, this gravestone doji guide is a solid reference.
How to Master the Gravestone Doji Pattern
The gravestone doji is a clean bearish reversal warning when it shows up in the right spot—usually after an extended push up and into resistance. The edge comes from stacking evidence: level first, then confirmation below the low, then extras like RSI/MACD context, moving-average confluence, and volume.
Trade it like a professional: wait for price to confirm, keep risk tight and consistent, and use a stop above the wick (often 10–20 pips in FX, or an ATR buffer elsewhere). You’ll still take losses—everyone does—but if you control size and only take the ones with real confluence, the pattern can be a useful tool instead of a random candle you hope will work.
How do you turn gravestone doji setups into repeatable, trackable results?
Because gravestone doji trades depend so much on context (trend strength, resistance quality, confirmation candles, volume, and risk buffers), the fastest way to improve is to review them as a group instead of judging any single outcome. Logging each setup—market, timeframe, location vs key levels, entry trigger, stop placement, R multiple, and whether you had confluence like RSI/MACD—makes it easier to spot which conditions actually increase follow-through and which ones lead to chop and fakeouts. Over time, that kind of performance tracking turns “this pattern works sometimes” into clearer rules you can execute consistently. Using a dedicated journal also helps you monitor PnL, drawdowns, and statistics by instrument and session, so you can size appropriately and avoid over-trading marginal signals. A structured tracker like Rizetrade trading journal analytics dashboard for trade tracking and performance metrics can support that review process by keeping your notes, screenshots, and results organized in one place.