Japanese candlestick anatomy

Japanese candlestick anatomy

Let’s break down the different parts of a Japanese candlestick.

The longer the body is, the more intense the buying or selling pressure. This means that either buyers or sellers were stronger and took control.

Short bodies imply very little buying or selling activity. In trading lingo, bulls mean buyers and bears mean sellers.

Long white Japanese candlesticks show strong buying pressure.

The longer the white candlestick, the further the close is above the open.

This indicates that prices increased considerably from open to close and buyers were aggressive.

Mysterious Shadows

The upper and lower shadows on Japanese candlesticks provide important clues about the trading session.

Upper shadows signify the session high.

Lower shadows signify the session low.

Candlesticks with long shadows show that trading action occurred well past the open and close.

Japanese candlesticks with short shadows indicate that most of the trading action was confined near the open and close.

Long upper shadow and short lower shadow, this means that buyers flexed their muscles and bid prices higher.

If a Japanese candlestick has a long lower shadow and short upper shadow, this means that sellers flashed their washboard abs and forced the price lower.