Candlestick - Long Legged Doji

Long Legged Doji

The Long legged doji candlestick is a type of candlestick does not have body, with long upper and lower shadows, where the opening and closing price are identical and appears as small horizontal line in the middle of the range.

Long legged doji is a very significant reversal formation because it shows that the market reaches the extreme point of the trend and a temporary balance between the demand and supply before reversing to another direction. Long legged doji indicates that the market tends to reverse immediately after the this signal. The trading signals are to buy at the bottom and sell at the top.

Important : The doji candlestick must occur at the extreme level of the trend to significant the reversal signal. If it occur in the midrange, this candlestick is called rickshaw man and it does not generate any particular trading signal.

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