Candle question

At a bottom, what is the significance of a candle with a small body relative to its long upper shadow and little or no lower shadow - the candle is called an inverted hammer, I believe?

And at a top, what is the significance of the same candle formation - an inverted hanging man, I guess?

Thanks, --george

glebecki said:

At a bottom, what is the significance of a candle with a small body relative to its long upper shadow and little or no lower shadow - the candle is called an inverted hammer, I believe?

And at a top, what is the significance of the same candle formation - an inverted hanging man, I guess?

Thanks, --george

Click to expand...

Hi George,

Firstly, It should be remembered that Candlesticks contain the same information (albeit in a more visual way) as simple Bars. IMO, too much emphasis is placed on a single candlestick, when in reality one must look at the previous bars to gain a better understanding of what is really happening. On their own (as a single pattern), I would argue that they can be extremely misleading and of little use.

Anyway, in answer to your question the candlestick you mentioned would suggest that Selling overpowered Buying. Price was driven up but found resistance and was driven back down. Without seeing the previous bars or understanding Volume on those days I would be unable to offer any further insight.

Maybe others can....

Regards,

Chorlton

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Thanks, Chorlton. And thanks, guten las -- george