Patterns Similar to Dragonfly Doji

Patterns Similar to Dragonfly Doji

by Alison Davis

Dragonfly Doji candlesticks are a popular type of graph. They feature a series of small, overlapping circles. This design is often used as a symbol for change or progress. It can also be used to represent the cycle of life. The dragonfly doji is another popular pattern used as a candlestick design in trading. There are many variations on this particular candle, and it’s usually associated with bullish movements. Below are patterns similar to the dragonfly Doji candlestick pattern.

1. Piercing Pattern

A piercing pattern represents an uptrend. In a downtrend, you will see candlesticks form a smaller version of a dragonfly or vice versa. The difference between the two is the size of the first circle. If the first circle is larger than the subsequent ones, we have a piercing pattern. On the other hand, if the first circle is smaller than the subsequent ones, we have a retracement. This pattern looks like a fish hook.

2. Double Dragonfly

This is another variation of the Dragonfly. A double of this pattern looks very much like the original, except for two circles instead of one. This pattern occurs when the trend continues after a minor correction. The first circle is relatively large compared to the second one, which is not as big. After the price makes a second move above the high of the first circle, the second circle becomes bigger. This is called a false breakout because the bears fail to capitalize on their advantage, and the bulls retake control.

3. Engulfing Patterns

In candlestick charts, an engulfing pattern is another option for the dragonfly shape. An engulfing pattern consists of three white candles followed by a black candle. It often indicates that the uptrend is about to end. A bearish engulfing pattern means a major downward trend shift is coming. To the upside, we’ll have an optimistic engulfing pattern. The first candlestick is relatively large compared to the ones that follow in its wake. After the last candle closes at the low, the third candle is relatively small compared to the others.

4. Three Black Crows Pattern

Three black crows occur when three consecutive candlesticks close below the previous day’s open. These types of candlesticks are extremely common in downtrends and indicate a possible reversal. They’re similar to a hammer, but they don’t have any gaps between them. They look like three birds sitting around a fire pit. This pattern has a strong resemblance to wicks (W) and wedges (W). Wicks show up at the beginning of a new, upward movement while wedges come near the middle. A three-black crow candlestick confirms both occurrences. Traders should watch out for these candlesticks during an uptrend. When the trend reverses direction, buyers become spooked and pull back. That’s why buyers tend to sell off heavily when this candlestick appears.

5. Triangulation

Triangulation is a term being thrown around a lot lately. But what exactly does it mean? Essentially, triangulation refers to forming a triangle within a long-term chart where all three legs point toward different sides of the base. During an uptrend, the price action moves higher and makes lower highs, forming a descending triangle. On the flip side, during a downtrend, the price action moves lower and forms an ascending triangle, showing the downtrend’s strength. Many people believe that when the price action breaks down from the triangle, it signals a good chance to enter the market. But triangles can also be used to exit. To use them effectively, traders must know how to interpret them. Most importantly, triangles are broken when prices break under the bottom leg. That’s why many traders wait until the bottom of the triangle before entering the markets.

6. Hammer Pattern

A hammer pattern resembles a person pounding his fist against the table. It happens when two or more candlesticks of the same size and color close together. It usually occurs when the price goes on a large bullish run, causing the momentum to stall. Once the momentum slows down, sellers step in and push the price lower. A hammer pattern is also known as a head and shoulders, and it is considered a bearish indicator.

7. Head-and-Shoulders Pattern

The head-and-shoulders pattern isn’t actually a specific candlestick pattern. Instead, it refers to how prices act when they reach certain levels over time. It happens when prices tend to move up and down before settling into a new range. A head-and-shouldered formation consists of several waves, including a peak, a neckline, and sometimes shoulders. The first wave is the head, which buyers create. If the next wave is an inverted head, then the head is false. It turns into a body if the third wave is an upright one. Finally, we get to the shoulders. After that, it’s basically a continuation pattern.

8. Bullish Engulfing

Bullish engulfing is when one candlestick completely envelopes another. For example, the small white candle inside a green candle completely covers its body. There are several ways that this pattern could play out. It could show that the smaller candlestick will soon reverse. Or, it could simply be a sign that things aren’t going well right now. Either way, the larger candlestick tends to lead the other, so traders should pay attention.

9. Reversal Day EMA Pattern

This particular candlestick pattern looks for a series of candles where each closes near the high of the preceding candle. The problem is you need longer periods to spot it. You’d need five days’ worth of data for each candlestick. So, there might not be enough time to do this properly. However, if you see the patterns, traders may start selling based on the assumption that things will turn bad.

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