The **dragonfly doji** is a candlestick pattern often used in technical analysis. Here’s a more detailed explanation:

1. **Formation**:

- The open, close, and high prices of the session are nearly the same or very close.

- The candlestick has a long lower shadow, indicating that prices fell significantly during the session but recovered strongly by the close.

- It has little to no upper shadow, showing minimal upward movement.

2. **Appearance**:

- The candlestick resembles a "T" shape.

3. **Location and Context**:

- The dragonfly doji typically forms after a **downtrend**, where sellers have been in control. Its appearance suggests a potential shift in market sentiment.

4. **Market Psychology**:

- During the session, sellers push prices lower, creating the long lower shadow. However, buyers regain control, driving the price back to the open/high levels.

- This recovery suggests buyer strength, hinting at a possible **bullish reversal**.

5. **Interpretation**:

- When the dragonfly doji forms in a downtrend or near support levels, it’s often seen as a signal that the downtrend may be losing momentum, and an upward movement could follow.

- However, confirmation is needed, such as a strong bullish candle following the dragonfly doji.

6. **Limitations**:

- The dragonfly doji alone doesn’t guarantee a reversal. It should be analyzed in combination with other technical indicators or patterns.

### Example in a Chart:

- **Downtrend** → Dragonfly Doji forms → Next candle is bullish → Indicates reversal to an uptrend.

By understanding its structure and context, the dragonfly doji becomes a valuable tool for predicting market shifts.