How To Trade the Long-Legged Doji Candlestick

https://forexhero.info/lexatrade-forex-broker-company-background-and-security/ candlesticks are a member of the doji family. They are indecision candlesticks with a small real body, a long lower shadow, and a smaller upper wick. They can be found in up-and-down trends and are bullish or bearish coloring on stock charts. Long legged dojis show you that no one won with all that fighting between the bulls and bears. They’re the most significant during a long-term upward or downward trend.

In a doji, the opening and closing prices end where they started after both rising and dropping during the session. The tug-of-war between the bulls and the bears
results in a stalemate at the closing bell. As we have seen throughout this article, long legged doji candlesticks are a tool that can make trading the forex markets much easier. While trading, it is important to be extremely cautious on the emergence of long-legged doji candlestick near support and resistance levels.

Psychology of Long-Legged Doji

By signing up as a member you acknowledge that we are not providing financial advice and that you are making the decision on the trades you place in the markets. We have no knowledge of the level of money you are trading with or the level of risk you are taking with each trade. Some traders will want to see more confirmation—the price movements that occur after the long-legged doji—before acting. This is because long-legged dojis can sometimes occur in clusters, or as part of a larger consolidation.

And the market closes slightly higher which is a variation of the Dragonfly Doji. Notice that the price came into the area of support, rejection of lower prices. Because if you try to do that, you’re going to suffer in trading because there are hundreds and hundreds of patterns. And I will share with you two types of market conditions that you can use to trade the Dragonfly Doji. You can see the open and the close is the same level, this is why you see a straight line on the chart.

Psychology About Dragonfly Doji

It happens when the price of an asset opens at a higher price and then closes sharply lower. There are several ways to trade a long-legged doji, although pattern-based trading is unnecessary. HowToTrade.com helps traders of all levels learn how to trade the financial markets. A consolidation trade’s risk vs. reward scenario is likely less than a breakout or reversal trade. Also, there are fewer false signals compared to the other strategies.

We’ll use the Ethereum (ETHUSD) October 17th, 2021, daily chart to make this lucid. We have also assessed the overall strategy you need to use when trading using the pattern.

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The upper and lower shadows or tails, also known as wicks, show the high and low of the day. Long legged doji candlesticks are an important tool that can convey important information regarding the psychology of investors present in the market. However, in the world of trading, no single indicator is enough to trade. Long-legged doji candles are deemed to be most significant when they occur during a strong uptrend or downtrend.

It’s important to treat day trading stocks, options, futures, and swing trading like you would with getting a professional degree, a new trade, or starting any new career. These doji candles can look the same because of their small regular bodies. It is important to remember not to get caught up in exactly what these candlesticks look like.