THE ANATOMY OF THE CANDLESTICK
The CandleStick is composed of three main parts, the Real Body, the Upper Wick, and the Lower Wick. The Real Body is defined as the area between the Open and the Close of the CandleStick. The length of the Real Body represents the momentum of trading during the formation of the candlestick. A "Long Body" also called a "Tall Body" represents a lot of trading momentum during the session. A "Small Body" represents little momentum during the session. The "Upper Shadow" also called an "Upper Wick" represents the area of price rejection. The "High" of the upper shadow represents the maximum extent of higher price rejection during the trading session. The "Low" of the lower shadow then represents the maximum extent of lower price rejection. A candlestick with little to no shadow indicates there was little to no rejection of price at the price extremes during the session and a candlestick with long or tall shadows means the price was rejected. I will go more into price rejection in a later tutorial.
SUMMARY
1. The Real Body of the Candlestick represents price momentum during the trading session.
2. The candlestick "Wicks" represents the area of price rejection during the trading session.
The CandleStick is composed of three main parts, the Real Body, the Upper Wick, and the Lower Wick. The Real Body is defined as the area between the Open and the Close of the CandleStick. The length of the Real Body represents the momentum of trading during the formation of the candlestick. A "Long Body" also called a "Tall Body" represents a lot of trading momentum during the session. A "Small Body" represents little momentum during the session. The "Upper Shadow" also called an "Upper Wick" represents the area of price rejection. The "High" of the upper shadow represents the maximum extent of higher price rejection during the trading session. The "Low" of the lower shadow then represents the maximum extent of lower price rejection. A candlestick with little to no shadow indicates there was little to no rejection of price at the price extremes during the session and a candlestick with long or tall shadows means the price was rejected. I will go more into price rejection in a later tutorial.
SUMMARY
1. The Real Body of the Candlestick represents price momentum during the trading session.
2. The candlestick "Wicks" represents the area of price rejection during the trading session.