Technical Definition
A bullish reversal pattern where the open, high, and close prices are almost the same, while the candle has a long lower shadow.
The market moved sharply downward during the session, but buyers pulled the price all the way back up before the close. This pattern reflects clear rejection of lower prices.
Sellers tried to push lower but failed.
Market Psychology
Context
Market is usually in a downtrend Selling pressure dominates sentiment
Attack
Sellers push price down sharply Fear triggers stop-loss selling At lows, buyers begin to absorb supply
Defense
Buyers regain full control Price closes near the session high Sellers lose confidence
Pattern Anatomy
Open ≈ Close ≈ High
Buyers regained full control by the close.
Very Long Lower Wick
Significant drop during the session, followed by recovery.
No/Negligible Upper Wick
Price closed near the absolute high.
Extremely Small Real Body
Indecision turned into defense.
Pattern Rules
Open ≈ Close ≈ High
Defines the Dragonfly structure.
Real body is almost non-existent
Doji characteristic.
Lower shadow is very long
Price rejection.
Upper shadow is absent or extremely small
Buyers held the high.
Appears after a decline
Reversal context.
Signal Confirmation
- A bullish candle following the Dragonfly Doji
- Price holding above the Dragonfly Doji’s low
- Alignment with broader trend structure