Candle Body and Wick
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The candle body shows the distance between the open and close. The wicks, also called shadows, show the price extremes beyond the body during the period.
Reading the Body
A relatively large body indicates a larger distance between open and close. A small body indicates that the open and close were relatively close together.
Reading the Wicks
A long upper wick means price traded significantly above the body before returning lower by the end of the period. A long lower wick means price traded significantly below the body before recovering higher by the close.
These observations describe what happened during the period. Their interpretation depends on context such as trend, support and resistance, timeframe, volatility, and the surrounding candles.
Key Terms
Candle body, wick, shadow, open, close, high, low, context.
Knowledge Check
- What does the candle body represent?
- What can a long upper wick tell us about the period?
- Why should we interpret candle shape in context?
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