Long Legged Doji Candlesticks
Long legged doji candlesticks are a member of the doji family. They are an indecision candlestick that has a small real body, longer lower shadow, and a smaller upper wick. They can be found in both up trends, down trends and are bullish or bearish coloring on stock charts. Long legged doji candlesticks tell the story of indecision.
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What Are Long Legged Doji Candlesticks?
The long legged doji candlesticks have long upper and lower shadows with an open and closing price that was basically the same. This makes the shape of a cross that’s more defined than the smaller doji. The reason for this is because the open and closing price are virtually the same. So the real body is just a line.
Long legged doji candlesticks are super indecisive. The open and closing price are the same. The upper and lower shadows or tails, also known as wicks, show the high and low of the day .
Long legged dojis show you that with all that fighting between the bulls and bears, no one won. They’re the most significant during a long term upward or downward trend.
Trading is all about supply and demand. The more of a demand for a stock with a lessening supply shoots price up or down. When supply and demand are nearing equilibrium, long legged dogs candlesticks form.
How to Trade Long Legged Doji Candlesticks
- Traders take a long position when price breaks above the high of the candlestick
- They use a candlestick close below the low as a stop level
- They take a short at the break of the low and use a candlestick close above high as a stop
Patterns Within Patterns
Being able to find patterns within patterns is important. Whether you’re looking for a long legged doji bullish pattern or confirming a trend, finding patterns within patterns is a good thing.
These doji candles can look the same because the of small regular body. It’s important to remember not to get caught up in exactly what these candlesticks look like. Look at the overall patterns.
Long legged dojis can be found in any timeframe on a chart but are the best on long term charts. This is because there are more traders participating, which in turn, gives more information.
As we learned earlier, the long legged doji candlesticks are best used on time frames like the daily chart. There’s more information on these charts that confirm a reversal.
It’s a bit difficult trading this candlestick pattern because of the long lower shadow and upper wicks. It makes risk management a bit challenging because there can be a lot of price action built into one candle.
Sometimes it’s best to wait for a better confirmation candle to take a trade. It’s a good practice to take entries on smaller candlesticks to help manage risk properly.