Bullish long legged doji

Type:             Reversal

Relevance:    Bullish

Prior Trend:  Bearish

Reliability:    Medium

Confirmation:                     Definitely required

No. of Sticks:                     1

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.