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Definition

 

Long Legged Doji can be recognised from its long shadow. It reflects the uncertainty of the market participants.

  • Trend: Reversal
  • Expected trend: Bearish
  • Previous trend: Neutral
  • Reliability: Moderate
  • Type: Bearish
  • Number: 1

Recognition

  • The market is in an upward trend.
  • There is a Doji with a gap in the previous trend’s direction.
  • The body of the Doji is small, only a horizontal line.
  • The higher and lower shadow of the Doji has similar length.

Interpretation

This type of Doji reflects uncertainty among both buyers and sellers. The Long Legged Doji shows that trading took place both above and below the opening price and the share closed near the opening price. One can be sure in the reversal if there is a large trading volume on that day.

Important factors

Long Legged Doji is a reliable signal at the top of an ascending trend. It consists of a single candle. Therefore, a confirmation on the next day is crucial. The confirmation can be a candle in the opposite direction of the current trend.