Interpreting Candlestick Body Sizes for Market Insights

#Candlesticks come in different body sizes which can provide insights into market sentiment. Long candlestick bodies indicate strong buying or selling pressure during a particular time frame. If the close is above the open with a long body, this indicates that buyers are in control of the market, whereas if the open is above the close with a long body, this indicates that sellers are in control.

On the other hand, short and small candlestick bodies indicate little buying or selling activity during the chosen time frame. By paying attention to the size of the candlestick body, traders can gain a better understanding of the current market sentiment and make more informed trading decisions.

The Importance of Candlestick Shadows for Trading Analysis

#Candlestick charts provide traders with important information about price action during a trading session. The upper and lower shadows, also known as tails, are particularly useful in this regard. The upper shadow represents the session high, while the lower shadow represents the session low.

Candlesticks with long shadows indicate that the trading action extended well beyond the open and close of the session. On the other hand, candlesticks with short shadows indicate that most of the trading activity was confined to the open and close.

If a candlestick has a long upper shadow and a short lower shadow, this indicates that buyers were initially in control and drove the price higher. However, for some reason, sellers later entered the market and drove the price back down, ultimately ending the session near its open price.

Conversely, if a candlestick has a long lower shadow and a short upper shadow, this means that sellers dominated the session and pushed the price lower. However, buyers eventually entered the market and drove the price back up to end the session near its open price.

By paying attention to the shadows on a candlestick chart, traders can gain important insights into market sentiment and make more informed trading decisions.