What Is a Shadow?

A shadow, or a wick, is a line found on a candle in a candlestick chart that is used to indicate where the price o🥀f a stock has fluctuated relative to the opening and closing prices. Essentially, these shadows illustrate the highest and lowest prices at which a security has traded over a specific time period.

The shadow (line part) of the candlestick can be compared with its wide part, which is called the "澳洲幸运5官方开奖结果体彩网:real body."

Understanding Shadows

A shadow can be located either above the澳洲幸运5官方开奖结果体彩网: opening price or below the澳洲幸运5官方开奖结果体彩网: closing price. When there is a long shadow on the bottom of the candle (like that of a hammer), there is a suggestion of an increased level of buyi༒ng and, depending on the pattern, potentially a bottom.

There are two main forms of analysis in trading: 澳洲幸运5官方开奖结果体彩网:fundamental and technical analysis. Fundamental analysis 🦹relies on the perf𒁏ormance of the company to provide clues and insights about the future direction of the stock. Fundamental analysts track earnings and revenue metrics.

By comparison, 澳洲幸运5官方开奖结果体彩网:technical analysts concentrate on movements in price. They try to identify patterns in 澳洲幸运5官方开奖结果体彩网:price action and then use these patterns to predict the direction of price in the future. Fundamental analysis helps analysts select which stocks to trade, while technical analysis tells them when ꦿto trade them. The candlestick chart is꧒ one of many tools for technical analysis.

Identifying and Using Shadows

Every candlestick formation has an open, high, low, and close. The open, higꦑh, low, and c🔜lose refer to stock prices. These are the values that create the candlestick pattern. The box portion of the candlestick, which is either hollow or filled, is referred to as the body.

The lines on either end of the body are referred to as the wick or shadow, and they represent the high or low range for the time or tick period.

Candlesticks are used across various measures, such as time and ticks, and various frames such as one minute, two minutes, 1,000 ticks, or 2,000 ticks. No maꦡtter what the measure or frame, the formation and rules work ཧthe same.

Some technical analysts believe a tall or long shadow means the stock will turn or 🐷reverse. Some belཧieve a short or lower shadow means a price rise is coming. In other words, a tall upper shadow means a downturn is coming, while a tall lower shadow means a rise is coming. A tall upper shadow occurs when the price moves during the period, but goes back down, which is a bearish signal. A tall lower shadow forms when bears push the price down, but bulls pull it back up, which leaves a long line or shadow. This is considered a bullish signal.

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