Definition: Get the highest rated stock from Americanbulls for this pattern >>>
Long Legged Doji is a doji characterized with very
long shadows. It shows the indecision of the buyers
and sellers. It is one of the important reversal signals.
Recognition Criteria:
1. Market is characterized by a bearish mood and downtrend.
2. Then we see a Doji that gaps in the direction of
the downtrend.
3. The real body is either a horizontal line or it is
significantly small.
4. Both of the upper and lower shadows are long and
they are almost equal in length.
Explanation:
Long Legged Doji shows that there is a great deal of
confusion and indecision in the market. This particular
pattern shows that the prices moved well above and below
the day's opening level, however they finally closed
virtually at the same level with the opening price.
The end result is only a little change from the opening
price despite the whole volatility and excitement during
the day that clearly reflects that the market lost its
sense of direction.
Important Factors:
Long Legged Doji is more important at tops.
Long Legged Doji is a single candlestick pattern. It
requires confirmation in the form of a move opposite
to the prior trade on the next trading day.
