Dragonfly Doji
The Dragonfly Doji has a long lower shadow with the open, close, and high all near the same level at the top of the candle. It shows that sellers pushed prices significantly lower during the period, but buyers fought back and drove the price all the way back up to the open. At the bottom of a downtrend, it's considered a bullish reversal signal.
Dragonfly Doji candlestick pattern diagram
Pattern Anatomy
- Open, close, and high are all at or very near the same price (top of the candle).
- Long lower shadow showing significant intra-period selling that was fully recovered.
- Little to no upper shadow.
- Shaped like a "T" or a dragonfly with wings spread.
How to Interpret
- At the bottom of a downtrend: strong bullish reversal signal — sellers tried to continue the move but were overwhelmed by buyers.
- At the top of an uptrend: less reliable, but can signal exhaustion.
- The longer the lower shadow, the more dramatic the buyer-seller battle was.
- Look for bullish confirmation on the next candle.
- Volume on the Dragonfly Doji day adds conviction.
How Engulfy Detects the Dragonfly Doji
- Must first qualify as a Doji (body is very small relative to the total range).
- Upper shadow must be very small (open/close near the high).
- Lower shadow must be dominant, making up the majority of the total range (long lower tail).
A Dragonfly Doji will also register as a regular Doji. Engulfy reports both patterns when detected.
Expert References
Steve Nison describes the Dragonfly Doji as one of the most visually striking single-candle patterns, noting that its "T" shape instantly communicates the intra-period battle between buyers and sellers. Thomas Bulkowski's statistical research puts the Dragonfly Doji's reversal rate at roughly 55-58% when it appears at the bottom of a downtrend — modest, but above the baseline for single-candle patterns.
Controversy & Limitations
Like most single-candle patterns, the Dragonfly Doji has a modest hit rate on its own. It should be treated as one piece of evidence rather than a standalone trade signal. The pattern is more common in crypto markets due to 24/7 trading and frequent wicking, which can produce more noise. As always, context matters — a Dragonfly Doji at a key support level after a clear downtrend is far more meaningful than one appearing in a choppy sideways market.