Definition:             Get the highest rated stock from Americanbulls for this pattern >>>

Long Legged Doji is a doji characterized by very long shadows. It shows the indecision of the buyers and sellers and it is an important reversal signal.

Recognition Criteria:

1. Market is characterized by overall uptrend.
2. Then we see a Doji that gaps in the direction of the uptrend.
3. The real body of the Doji is either a horizontal line or it is significantly small (its length is not more than a few ticks).
4. The upper and lower shadows of the Doji are long and almost equal in length.

Explanation:

This particular doji shows that there is a great amount of indecision in the market. Long-legged Doji shows that the prices traded well above and below the opening price however they closed virtually at the level of the opening price. We have an end result with little change from the initial open despite all the excitement and volatility during the day showing that the market has lost its sense of direction.

Important Factors:

Long Legged Doji is more important at tops.

Since the Long Legged Doji is a single candlestick pattern, it is better to see confirmation in the form of a move opposite to the prior trade on the next trading day.