Thursday, August 20, 2009

Sexy Bodies & Strange Shadows (Japanese Candlesticks)

Sexy Bodies
  • Candlesticks have different body sizes.
  • Long bodies indicate strong buying or selling. The longer the body is, the more intense the buying or selling pressure.
  • Short bodies indicate very little buying or selling activity.
Mysterious Shadows
  • The upper and lower shadows on candlesticks provide important clues about the trading session.
  • Upper shadows signify the session high.
  • Lower shadows signify the session low.
  • Long shadows indicate that trading action occurred well past the open and close.
  • Short shadows indicate that most of the trading action confined near the open and close.
Long Shadows

  • If a candlestick has a long upper shadow and short lower shadow, it means bearish reversal signal.
  • If a candlestick has a short upper shadow and long lower shadow, it means bullish reversal signal.


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