> For the complete documentation index, see [llms.txt](https://docs.skyrexio.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.skyrexio.com/strategy-builder/built-in-conditions/candlestick-patterns/dragonfly-doji.md).

# Dragonfly Doji

### Introduction

The Dragonfly Doji is a **bullish reversal** candlestick pattern that signals potential **LONG opportunities** or **SHORT position exits**. This single-candle pattern features open, high, and close prices at the same level with a long lower shadow, indicating strong rejection of lower prices and potential buying interest.

### How Dragonfly Doji Works

Dragonfly Doji is a single-candle bullish reversal pattern with specific characteristics:

• **Open, high, close equal** - These three prices are at the same level\
• **Long lower shadow** - Significant lower shadow showing price rejection\
• **No upper shadow** - Little to no upper shadow\
• **T-shaped appearance** - Creates a distinctive T or dragonfly shape\
• **Context matters** - Most effective at support levels or after downtrends

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**Pattern Psychology:** The pattern shows sellers drove price significantly lower during the session, but buyers stepped in with such force that they pushed price all the way back to the opening level. This complete rejection of lower prices demonstrates strong buying interest.
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#### Key Characteristics

| Attribute        | Details                               |
| ---------------- | ------------------------------------- |
| **Category**     | Candlestick Patterns                  |
| **Type**         | Bullish Reversal Signal               |
| **Primary Use**  | LONG entries, SHORT exits             |
| **Timeframe**    | All timeframes supported (1m to 1M)   |
| **Confirmation** | Volume, support levels, trend context |

### Strategy Applications

#### 🟢 LONG STRATEGY (Primary Use)

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Dragonfly Doji is primarily a **LONG signal** - enter long positions when the pattern appears at support levels.
{% endhint %}

**Base Entry Order (LONG)**

```
Base Order Condition: Dragonfly Doji Pattern Detected
First Condition: Dragonfly Doji
Timeframe: 1H

Additional Confirmation:
First Condition: Volume
Timeframe: 1H  
Operator: Greater Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H
```

**Take Profit Orders (LONG)**

```
Rule 1: Exit condition - Target reached at resistance level
First Condition: Close Price
Timeframe: 1H
Operator: Greater Than
Second Condition: High Price
Timeframe: 1H

OR

Rule 2: Exit condition - Overbought momentum warning
First Condition: RSI
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 75

OR

Rule 3: Exit condition - Bearish reversal pattern detected
First Condition: Gravestone Doji
Timeframe: 1H
```

**Stop Loss Orders (LONG)**

```
Rule 1: Stop loss - Pattern invalidated (price below dragonfly low)
First Condition: Close Price
Timeframe: 1H
Operator: Less Than
Second Condition: Low Price
Timeframe: 1H

OR

Rule 2: Stop loss - Volume surge breaks bullish momentum
First Condition: Volume
Timeframe: 1H
Operator: Greater Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H
```

#### 🔴 SHORT STRATEGY (Secondary Use)

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**Counter-Trend Risk:** Using Dragonfly Doji for SHORT entries is high-risk and should only be considered in extreme overbought conditions.
{% endhint %}

**Take Profit Orders (SHORT) - Exit existing positions**

```
Rule 1: Exit condition - Dragonfly Doji signals trend reversal
First Condition: Dragonfly Doji
Timeframe: 1H

OR

Rule 2: Exit condition - Support level reached
First Condition: Close Price
Timeframe: 1H
Operator: Less Than
Second Condition: Low Price
Timeframe: 1H
```

### Risk Management Guidelines

#### Position Sizing

| Strategy Type      | Position Size       | Conditions                    |
| ------------------ | ------------------- | ----------------------------- |
| **LONG Strategy**  | Standard            | Pattern appears at support    |
| **SHORT Strategy** | Exit signal only    | Counter-trend not recommended |
| **High Volume**    | Increase confidence | Can use larger size           |
| **Low Volume**     | Reduce size         | Wait for confirmation         |

### Best Practices

#### For LONG Strategies

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1. **Support context** - Most effective at key support levels
2. **Volume confirmation** - Ensure higher volume on dragonfly candle
3. **Shadow length** - Longer lower shadow indicates stronger reversal
4. **Follow-through** - Confirm with next candle's bullish action
   {% endhint %}

### Market Conditions Analysis

| Market Type         | LONG Strategy Effectiveness    |
| ------------------- | ------------------------------ |
| **Downtrend**       | 🟢 High (reversal signal)      |
| **Uptrend**         | 🟡 Medium (continuation)       |
| **Ranging**         | 🟢 High (at support)           |
| **High Volatility** | 🟢 High (clear signals)        |
| **Low Volume**      | 🔴 Low (wait for confirmation) |

### Related Patterns

| Pattern             | Relationship           | Link                                                                                                                   |
| ------------------- | ---------------------- | ---------------------------------------------------------------------------------------------------------------------- |
| **Gravestone Doji** | Opposite signal        | [Gravestone Doji](https://docs.skyrexio.com/strategy-builder/built-in-conditions/candlestick-patterns/gravestone-doji) |
| **Hammer**          | Similar bullish signal | [Hammer](https://docs.skyrexio.com/strategy-builder/built-in-conditions/candlestick-patterns/hammer)                   |
| **Doji**            | Neutral variant        | [Doji](https://docs.skyrexio.com/strategy-builder/built-in-conditions/candlestick-patterns/doji)                       |

### Conclusion

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Dragonfly Doji is primarily a **LONG signal** indicating strong rejection of lower prices and potential upward reversal. The pattern shows powerful buying interest at lower levels.
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#### Key Takeaways

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* **PRIMARY USE**: LONG entries at support levels
* **SECONDARY USE**: SHORT exits when holding positions
* **ALWAYS**: Confirm with [Volume](https://docs.skyrexio.com/strategy-builder/built-in-conditions/volume-data/volume) and support level context
  {% endhint %}

***

{% hint style="info" %}
**Ready to Build Your Own Strategy?**

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{% endhint %}