What is a long-legged doji candlestick pattern?

The long-legged doji candlestick pattern has both long upper and lower shadows (wicks) and generally has a closing price near where it opened in the time frame of the candle. The long-legged doji candlestick can signal extreme indecision in the current market with a large trading range but no winner between buyer and sellers to move price in one direction. 

 long legged doji

Long-legged Doji image via Wikipedia

This indecision candle can be seen by investors as a signal that there is a high probability of an end to the current trend as traders and investors were unable to keep the price moving in one direction. 

In an uptrending market a long-legged doji can warn of an impending reversal to the downside. In a downtrending market a long-legged doji can signal a potential reversal to the upside. 

Long-legged doji candles can also signal the end of a trend but the beginning of a sideways range bound market as neither buyers or sellers can get the upper hand in bidding a market up or down. (Buyers and sellers are always equal in trading action it is the price that changes and moves based on current bid/ask spreads agreeing to make a trade).

  • Long-legged doji have very long upper and lower wicks and a tiny body with the opening and closing price almost the same.
  • This candle pattern signals indecision.
  • It can be a reversal signal during strong trends. 
  • It can also signal a new range bound market. 
  • Many traders will wait for the next candle on the chart after the long-legged doji to confirm a reversal as it creates a higher probability of success than signaling off just one candle. 
  • It does not always work and can just be a news driven volatility expansion before the existing trend resumes. 
  • The odds of it being a reversal signal are higher when the long-legged doji candle occurs in an uptrend near an overbought reading or it appears in a downtrend near and oversold reading.
long legged doji
Chart courtesy of TrendSpider.com

By Steve Burns

After a lifelong fascination with financial markets, Steve began investing in 1993 and trading his accounts in 1995. It was love at first trade. After more than 30 successful years in the markets, Steve now dedicates his time to helping traders improve their psychology and profitability. New Trader U offers an extensive blog resource with more than 4,000 original articles, online courses, and best-selling books covering various topics.