Tuesday, June 28, 2016

What is Long-legged Doji: Bullish Reversal, Bearish Reversal?

What is Long-legged Doji: Bullish Reversal, Bearish Reversal?


Long-legged doji is a candle with long upper and lower shadows and a small real body. The pattern shows that there is an indecision between the buyers and the sellers, and that the market is approaching transition period.

Long positions can be taken in case of Bullish Long Legged Doji, once high of the candle is exceeded.

Shorts can be initiated once the low of the candle is broken, in case of Bearish Long Legged Doji.

Bullish:

Bullish Long Legged Doji has very long shadows on both the ends. The patterns shows indecision of buyers and sellers. It is a bullish reversal pattern. In this pattern, market is in a bearish mood and is in downtrend. Then, a Long Legged Doji appears, which gaps in the current trend.

This pattern requires confirmation by way of opposite move to the prior trend on next day.

Bearish:

Bearish Long Legged Doji has very long shadows on both the ends. The pattern shows indecision of buyers and sellers. It is a bearish reversal pattern. In this, market is in a bullish mood and is in uptrend. Then, a Long Logged Doji appears, which gaps in the current trend.