What it looks like
Open and close at almost the same price, so the body is tiny, with long upper and lower wicks of roughly similar length. The candle's full range is large compared with recent candles. When the body sits right in the middle, some traders call it a rickshaw man.
What it means
Neither side won the candle. After a strong move, that hesitation can be the first sign the move is tiring, because the side that had been in control could not finish the candle on its terms. In a quiet, sideways market the same candle means nothing, which is why the break of its high or low matters more than the candle itself.
How to trade it
- 1
Never trade it on its own. Mark the candle's high and low.
- 2
Confirmation: a later candle closes above the high (buy signal) or below the low (sell signal).
- 3
Entry: at the close of that breakout candle.
- 4
Stop: on the other side of the long-legged doji. Example on US30: after a fall, a long-legged doji forms from 46,700 to 46,860. A candle closes at 46,870 above the high. Buy at 46,870, stop at 46,690, a 180 point risk.
- 5
Target: the next key level, or 2 times the stop.
Price closes back inside the candle's range after breaking out of it.
Where it works best
After a strong move into a key level on 1 hour to daily charts, where hesitation actually means something.
WickSpeak spots every long-legged doji automatically and names it on the candle that made it. The note says what it is, that it should not be traded alone, how to trade the break of its high or low and what proves that break wrong. In Playbook you can use it as a condition in a play, alone or alongside other patterns and indicators (any of the 146 patterns can be a condition), and backtest it on past candles with your own costs.
Common mistakes
- Reading it as a reversal on its own.
- Ignoring how wide the stop becomes on a candle with long wicks.
- Trading it in a quiet range where it means little.
Related patterns
Questions traders ask
What does a long-legged doji mean?
Buyers and sellers both pushed price a long way and the candle still closed where it opened. It shows heavy indecision.
Is a long-legged doji a reversal signal?
Not on its own. After a strong move it can be an early warning, but it needs a close beyond its high or low to give a signal.
How wide is the stop on a long-legged doji?
The stop goes on the other side of the candle, which can be wide. Check that the target is worth that risk before trading it.
What is the difference from a high wave candle?
They are very similar. A high wave candle is defined by very long wicks on a big candle after a big swing each way; a long-legged doji focuses on the open and close being equal.