Visualization technique in Trading. Today, we are talking about the Visualization technique.
view candlesticks bodies as armies:
- Bulls are marching Up
- Bears are marching Down
- If they march a lot they’re a strong army with a lot of stamina
- If they march a little bit they’re less strong, but a successful march nonetheless.
CANDLESTICKS: RELATIVE SIZE OF THE WICKS
wicks are like fallen soldiers on the battlefield. These are the soldiers who tried to march into enemy territory but failed.
From the above image, you can see an army of bulls has gone up and backed down and pushed up again gaining a Victory.
- This indicates a high degree of volatility.
- It also makes the candle a bit more neutral as the bears managed to push through the lows even though the bulls moved up.
IMPORTANT
- If the wicks are large compared to the size of the body, we give more importance to the wick.
- If the body is large relative to the size of the wicks, we give more importance to the body.
Wicks above and Wicks below
Wicks above are
Fallen bull soldiers or bearish wicks
Wicks below are
Fallen bear soldiers
bullish wicks
SUMMARY OF WICKS
- Large wick: Represents fallen bears
- Very uncertain
- lots of movement
- Small wick: less of Battle going on
- Little uncertain
- Less movement
