Bearish Long Legged Doji Pattern

by · December 31, 2009

BEARISH LONG LEGGED DOJI PATTERN (BLLDP)
indecision of the buyers and sellers

Characteristics:
1. Overall, market is on an uptrend;
2. There is then a Doji that gaps in the direction of the uptrend;
3. The body of the Doji is either a horizontal line or it is significantly small; and
4. The upper and lower shadows of the Doji are long and are almost of equal length.

Brief Explanation:
The BLLDP is a Doji portrayed by very long shadows. This shows the indecision of the buyers and sellers. It is an important reversal signal. The Long Legged Doji tells us that the prices trade well above and below the opening price. However, they close virtually at the opening price level. The end result is a very little change from the initial open despite the excitement and volatility during the day. The market has lost its sense of direction.

Notes:
1. The Long Legged Doji is a single candlestick pattern
2. On Day 2, a confirmation in the form of a move opposite to Day 1’s trade is suggested.