Trading the Dragonfly Doji and Gravestone Doji
In the image, you can see a gravestone doji and a dragonfly doji that appeared in a choppy, (mostly) sideways period.
These two candlestick signals only show indecision. They are not very useful to us because of the context in which they occur.
Near the center of the image, you will see a long-tailed doji (or long-tailed spinning top). I do not consider this formation to be a dragonfly doji, because the upper wick is a bit too long.
The long-tailed doji is, however, a bullish signal for a couple of reasons: 1, the long lower wick is bullish; and 2,
the size of this candle is very large relative to any other candlestick in the image. Since it showed a rejection of lower price and was much larger than the other candlesticks in the area, I would consider this to be a pretty strong bullish indication – even though it occurred from sideways price action.
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