Breaking Down the Parts of a Japanese Candlestick
The Body: Size Matters
Just like people, candlesticks come in all shapes and sizes—and in trading, analyzing their “bodies” can reveal a lot about market sentiment.
Long bodies indicate strong buying or selling pressure:
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A long bullish (white or hollow) candlestick shows that buyers were in control, pushing the price significantly higher from the open to the close.
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A long bearish (black or filled) candlestick reflects strong selling pressure, with sellers dominating the session and driving the price down sharply.
The longer the body, the more decisive the market movement was in that direction.
Short bodies, on the other hand, suggest indecision or a lack of momentum:
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There wasn't much difference between the open and close, indicating that neither buyers (bulls) nor sellers (bears) had a strong grip on the market.
The Shadows: What Lies Beneath
We’re not talking about dramatic makeup here—shadows, also known as wicks, provide valuable insight into the highs and lows of the trading session.
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The upper shadow represents the highest price reached during the period.
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The lower shadow shows the lowest price reached.
Candlesticks with long shadows suggest that prices moved well beyond the open and close, highlighting market volatility and testing of extremes.
Candlesticks with short shadows indicate that trading was mostly confined near the open and close, with little deviation in price.
Interpreting Long Shadows
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A candlestick with a long upper shadow and a short lower shadow signals that buyers initially pushed prices higher, but sellers stepped in and dragged the price back down toward the opening level. This hints at potential selling pressure or resistance.
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A candlestick with a long lower shadow and a short upper shadow suggests that sellers drove prices lower during the session, but buyers regained control and lifted the price back up—often seen as a sign of buying interest or support.
By studying candlestick bodies and shadows together, traders can get a clearer picture of who controlled the market during a session—buyers or sellers—and anticipate potential shifts in momentum.