30 May 09

Components Of A Forex Candlestick

There Are Two Components Of A Forex Candle Stick

1. Body and

2. The Wick (the thread like part of a candle).

Body is the difference between the opening price and the closing
price of the candle.

The wick on the other hand represents how high and how much low
did the candle move around in that duration.

While most of the traders focus on the body of the candle to see
the momentum in the market, smart traders also focus on the size of
the wick.



The reason being, the size of the wick truely represents the state
of the market. A large wick would tell that market is facing strong
support or resistance depending on if the candle is bullish or bearish.

So even though the size of the body is huge, an equally long wick
would be an indication to stay away from the market.

So, the next time if you look at a candle for analysis, along with
body, also focus on the size of the wick.