Candles that often mark a turn
Intermediate · 1 min
A few shapes show up often enough at turning points to be worth recognising.
Some candle shapes have names because traders kept noticing them near the end of a move. Knowing them is useful. Believing them is not.
- A long wick below with a small body near the top, after a fall: sellers drove it down and buyers took the whole move back before the close.
- A long wick above with a small body near the bottom, after a rise: the opposite, and it means buyers ran out of room.
- A candle whose body completely covers the previous day's body in the other direction: one day undid the last one entirely.
- A very small body with wicks both sides, after a long run: the argument that had been one-sided is suddenly even.
What these share is a day on which control changed hands. That is worth noticing, particularly when it happens at a price the share has turned at before. It is still only one day of evidence.
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Works with
- The hammer candle — A small body on a long lower wick, after a fall — and why one candle is never the whole story.
- Candles that warn of a top — Three single-day shapes that show buyers losing control near a high — and the rule that confirms any of them.