When trading with candlesticks, traders are often attracted to the analysis of the candle's body and its shape. But in reality, wick, especially long wick analysis, can be the cherry on top of the cake.
Usually, long wicks indicate a situation where one side, either bulls or bears, is overpowering the other with better conviction to move the price.
Let's look closely at the information it reveals and how you can trade them!
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A long bottom wick formation in any potential support area reveals that the bulls are trying hard to overpower the bears. It also indicates that the price is getting rejected from a level where bulls are supposed to reverse the momentum.
In this way, long upper wick formation in a potential resistance zone tells the exact opposite story.
Some candles can have long wicks on both sides and the wicks are almost equal, with a comparatively smaller body in the middle. These are called spinning tops. It indicates both bulls and bears are actively trading to direct the price movement while none can overpower the other.
In this case, wait for a strong bullish or bearish candle following the spinning top to understand which entry side can be the prudent course of action.
Long-wick candles can add great value to your trading calls if combined with the power of existing support or resistance zones. It can help calculatively anticipate trend reversals as well as trend continuations more efficiently if you pay close attention.