A price move lower following the pattern could induce traders to enter short positions. A long-legged doji pattern indicates indecision because neither the bulls nor bears make any real progress, despite strong moves both up and down during the period.Īfter a strong advance, this type of indecision could mean that the bulls are losing control, from a bearish long-legged doji. To find out what each type of doji means, we can look at where the high and low points are and where that doji occurs within the trend.Ī long-legged doji occurs when the open and close are nearly the same price, but there are extreme highs and lows during the period, creating long tails. A long green daily candlestick may indicate that the buyers were strong that day, whereas a long red candle may indicate that sellers were strong.Ĭandlestick traders use this information to make decisions and devise trading strategies. Each candlestick chart pattern says something about the strength of the buyers and sellers within this timeframe. The tails or thin lines above and below the body of the candle mark the high price and low price recorded during the time period of the candle. If the open is below the close, the candle is coloured red or black. If the close is above the open, the candle is coloured white or green. Dojis may indicate bullish and bearish reversals in an asset’s price.Ī candlestick has a thick body marking the opening and closing prices. If sellers have been dominating and pushing the price down, a doji suggests that the buyers held their ground. A doji tells traders that buyers and sellers were balanced at the end of the day, but this may have big implications.
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