Introduction
A Long Legged Doji is one of the popular candlesticks. Long-Legged Doji is one of the types of doji candlesticks Pattern. It is a solo candle pattern that indicates market disturbance or an expected trend reversal. Noticeably because of its compact body and lengthy top and lower shadows, it resembles a cross.
It features a long wick that extends upward and downward, as well as a small or nonexistent body in the centre of the candle’s range. It means that prices close much higher than the bottom of the trading day, and there is a potential that the stock price may rise until a long-legged doji appears. The Long-Legged Doji is very useful in determining the complex market structure.
How to find Long-Legged Doji?
The method to find Long Legged Doji is very simple and explained in the steps below:
- Make sure the opening and closing prices of the Long-Legged doji candlestick match.
- Doji candlesticks should have strong upper and lower shadows. This feature shows that there was major buying and selling prior to a periodic “neutral” settlement.
- The size of the top and bottom shadows should be the same or similar.
Characteristics of a long-legged Doji candlestick
Long-legged Doji signals a trend break even though most patterns indicate a trend reversal or trend continuance. After an impulsive time, this is the consolidation period.
It is now possible to determine whether the long-legged doji represents a positive or negative reversal pattern based on the trend direction of the market action before it.
After a positive movement, a long-legged doji is seen as a negative reversal pattern. A long-legged Doji following a negative move, on the other hand, is seen as a positive reversal pattern.
You can see this in the image.
Information Table of Long-Legged Doji
| Structure | Description |
| Quantity of Candlesticks | One |
| Prediction | Indecision in Market |
| Prior trend | N/A |
| Relevant Pattern | High wave candlestick |
Trading Psychology
To trade price movement, you need to master the technique of interpreting candlestick tales. Due to the candlestick’s same beginning and closing prices, there is an equal power balance between buyers and sellers in this Pattern. At the time of more buyers than sellers in the market, the price will increase; conversely, when there are fewer buyers than sellers, the price will decrease.
The price is moving sideways since there are almost as many buyers as sellers during this candlestick pattern. During this candlestick formation, the price is in a balanced position and will only move up or down when there is an imbalance.
Doji candlesticks Breakout
Doji candlesticks’ ups and downs serve as effective support and resistance levels. A positive price trend will start on the chart with the breakout of the up Doji candlestick, whereas a negative price trend will begin with the breakout of the down Doji candlestick.
A Perfect Trading setup
Long-legged doji candlesticks, as we are aware, cannot be traded independently. Confluences may be applied to this candlestick to produce the ideal trading position. These are the three ways to apply when trading a long-legged Doji candlestick.
Here we are adding three technical tools to filter good and highly probable trade setups, which are as follows:
- Key level
- Higher timeframe analysis
- Breakout of high or low doji candlestick
Key level
To successfully execute a trade, it is necessary to use key levels. A breakout of the Doji candlestick’s high will signal a positive trend if a long-legged Doji candlestick appears in the support zone. Therefore, there is already a potential that a negative trend would reverse from a support zone, but you have increased the risk by adding a confluence of Doji and breakout.
Higher timeframes Analysis
Higher timeframe analysis is a straightforward approach to trading with institutions as well as a crucial stage in any trading plan. Just use the higher high and lower low approach to assess the trend while zooming out of the screen. Next, connect the trend’s direction with the direction of your trade setup.
Breakout of the candlesticks
This step will only be applied to the Long-Legged Doji pattern, and you will find it easy to choose a trading direction. The Doji candlestick’s high should break if you’re searching for a reversal from a support zone. If you are looking for a trend reversal from a resistance or supply zone, the low of the Doji candlestick should break. It serves as proof for trade access transactions.
Each candlestick pattern has its own set of advantages and disadvantages. Long-legged Doji candlestick patterns are no exception.
| Advantages | Disadvantages |
| On all forex pairings and time frames, the long-legged Doji candlestick pattern may be found. | Because the long-legged Doji candlestick pattern appears frequently in stormy market situations, it might create false indications. |
| The long-legged Doji candlestick pattern may be used to find trading strategies in both moving and consolidating markets. | Long-legged Dojis monthly, weekly, and daily usually have wide ranges, making them difficult to trade. |
| long-legged Dojis Works effectively when combined with other technical analyses. | To be traded efficiently, the long-legged doji pattern requires a solid diagnostic of the market situation. |
Conclusion
This candlestick pattern indicates that the market has reached a moment of balance between buying and selling pressure. Many mysteries are contained within a single Long legged doji candlestick. The Pattern can be used to trade breakouts, reversals, or market consolidations that are positive or negative.
On the price chart, the Pattern appears frequently, but you should only trade the candles that appear at the important levels. The trader must choose which approach is best given the circumstances of the market at the moment.
