Admin
April 05, 2020
The Long Wicks (also known as Long Shadows) candlestick pattern refers to a type of candlestick where the upper and/or lower wicks (shadows) are significantly longer than the body of the candlestick. These long wicks suggest that the price has moved significantly in one direction but was then rejected and reversed, leading to indecision in the market. The wicks highpght that buying or selpng pressure was not strong enough to maintain the price movement, and the price returned to near its opening or closing level.
✅ Long Upper Wick (Shadow): A long upper wick suggests that buyers pushed the price significantly higher during the session but were eventually overcome by sellers, causing the price to fall back down. This is typically seen as a rejection of higher prices.
✅ Long Lower Wick (Shadow): A long lower wick indicates that sellers drove the price lower during the session, but buyers regained control and pushed the price back up, rejecting lower prices. This is usually a sign of support and can signal a potential Bullish reversal when seen after a downtrend.
✅ Small Body: A small body (whether Bullish or bearish) indicates indecision in the market, as the price has moved substantially but closed near its opening price.
When the candlestick has a long upper wick and closes near the low of the session, it suggests that buyers tried to push the price up, but sellers managed to overpower them, potentially indicating a bearish reversal. This is often seen at the top of an uptrend or near resistance levels.
Example: A candlestick with a long upper wick and a small body at the top of an uptrend may suggest that the bulls tried to drive the price higher but failed, and the market may soon reverse downwards.
When the candlestick has a long lower wick and closes near the high of the session, it suggests that sellers pushed the price lower, but buyers took control, driving the price back up. This is often seen at the bottom of a downtrend or near support levels, indicating a potential Bullish reversal.
Example: A candlestick with a long lower wick and a small body at the bottom of a downtrend may indicate that the selpng pressure has been exhausted, and the bulls are taking control, signapng the start of an uptrend.
• Upper Wick: The long upper wick shows that buyers initially tried to push the price higher, but sellers resisted and drove the price back down. It signals that the market rejected higher prices, and a reversal or pullback may occur.
• Lower Wick: The long lower wick shows that sellers initially dominated, pushing the price lower, but buyers stepped in and drove the price back up, indicating that the market rejected lower prices. This can signal a Bullish reversal or a temporary pause in a downtrend.
A long upper wick after a strong uptrend can indicate that buyers are losing control, and sellers are starting to take over. This may suggest a potential bearish reversal.
Consider entering a short position if the next candlestick confirms the bearish trend (e.g., a bearish engulfing or a large bearish candle).
Set the stop-loss above the high of the candlestick with the long upper wick, protecting against any false breakouts to the upside.
Look for a support level or use a risk-reward ratio to determine your exit point.
Bullish Reversal (After a Downtrend) 📈A long lower wick after a strong downtrend can indicate that buyers are starting to gain control and the price may reverse upwards. The rejection of lower prices shows that the downtrend could be over.
Consider entering a long position if the next candlestick confirms the Bullish reversal (e.g., a Bullish engulfing or a large Bullish candle).
Place the stop-loss below the low of the candlestick with the long lower wick to protect against any false breakouts to the downside.
Look for a resistance level or use a risk-reward ratio to define your target.
✅ Volume: Pay attention to volume. A candlestick with long wicks combined with higher volume can indicate stronger rejection, adding weight to the reversal signal.
✅ Trend Context: The significance of long wicks is much higher if they occur after a strong trend. They often signify a potential trend reversal or pause.
✅ Support/Resistance Levels: Long wicks occurring near key support or resistance levels are generally more repable, as these levels tend to attract a significant amount of buying or selpng interest.
Candlesticks with long wicks (or long shadows) are significant because they indicate rejection of higher or lower prices. They show indecision in the market, where one side (buyers or sellers) tries to push the price in their favor but is eventually overpowered by the other side.
A long upper wick after an uptrend suggests a bearish reversal or pause in the trend. A long lower wick after a downtrend indicates a Bullish reversal or pause in the trend. When trading with long wick candlesticks, it’s essential to wait for confirmation from the next candlestick, and using other technical indicators or support/resistance levels can help strengthen the signal.