Candlestick patterns are quite popular when we talk about cryptocurrency trading. Although it has been many years since the Japanese rice merchants started using them for the first time, the popularity of usage of these patterns among cryptocurrency traders have seen a rapid rise recently.
There are many candlestick patterns; each signifying a different signal, and each coming out of a different shape of the candlestick, however, all are formed of basically four important considerations: the low price, the high price, the opening price and the closing price. So let us study the Dragonfly DOJI candlestick pattern in more detail.
What is a Dragonfly DOJI Candlestick Pattern
The Dragonfly DOJI Candlestick pattern occurs typically when the particular crypto-currency’s high price, opening price and closing price coincide. There is a long lower shadow, which is suggestive of some aggressive selling during the time duration. It is like a Hammer Candlestick Pattern, but different in the sense that the three prices are the same in this case, which may not be the case in a Hammer Candlestick Pattern.
What does a Dragonfly DOJI Candlestick Pattern Signify
Deductions and conclusions that can be drawn from a Dragonfly DOJI Candlestick pattern are innumerable. This is because, in economics and finance, everything works in conjunction with each other, and everything tends to affect each other. So maybe a market news clubbed with a Dragonfly DOJI Candlestick pattern could mean something else, as compared to when we consider the standalone Dragonfly DOJI Candlestick pattern. This is where cryptocurrency consulting companies like executium.com fall into place. However, there are also some general assumptions that can be made, and that would stand true for almost all Dragonfly DOJI Candlestick patterns in general:
The Dragonfly DOJI Candlestick pattern can occur either after a price drop or a price rise.
A kind of T shape is created, as the low price of the period is significantly lower than the high, opening and closing prices, which are usually the same.
If there is some price rise, and then a Dragonfly DOJI Candlestick pattern appears, it usually would mean that the price would now decline, vice-versa being true as well.
After the above, a confirmation candle happens, which is then followed by cryptocurrency traders making their trade moves.
The Dragonfly DOJI Candlestick pattern is a rare occasion that does not happen very frequently in cryptocurrencies.
How to Use a Dragonfly DOJI Candlestick Pattern
Like any other candlestick pattern, the Dragonfly DOJI Candlestick pattern also works best when clubbed with other technical indicators, especially when volumes are considered. The higher the volume, the greater is the dominance of the Dragonfly DOJI Candlestick pattern in a trade decision. A comprehensive and holistic picture is always better to infer the candlestick, rather than studying it standalone. Remember, it is easy to make some basic judgments out of the Dragonfly DOJI Candlestick pattern, but tough if you want to engage in more in-depth and complicated calculations. In that case, it is better to get some industry professionals, to do the task. Executium.com is one such name, which has carved a niche for itself, when it comes to analyzing and decoding various types of candlestick patterns.