Bodies of Japanese Candles

Bodies of Japanese Candles

As with people, Japanese candles have different types of bodies. And when it comes to Forex, analyzing the types of bodies of candles is quite a common task.

A long body candle means there was a lot of activity for sale or purchase. The longer the body, the more intense the pressure to sell or buy.

Short bodies imply that there was little activity, either for sale or purchase.

In Forex slang, bullish movements identify with bulls by their way of hitting bottom up and a bullish move (most are those who buy) is called bullish. By contrast, bearish movements are identified with bears by their form of hitting from top to bottom and a bearish movement (most are those who sell) is called "bearish".

 

[caption id="attachment_672" align="aligncenter" width="350"] Bodies of Japanese Candles[/caption]

Bull-type candles, or upwards, are usually white or green, but each user can assign the colors they want.

In this case, the white candle indicates a great buying pressure. The longer the sail body, the further away the closing price is from the opening price. This means that prices increased significantly from the opening price because buyers were aggressive.

Bear candles, or those that go down, are usually black or red, although users may vary the color.

In the figure above we also see a long black candle, which means sales pressure. The longer the body of the black candle, the further below will be the closing price with respect to the opening price. This indicates that the price fell significantly from the opening of the candle, due to the aggressiveness of the sellers.

 

Shadows of the Japanese Candles

[caption id="attachment_673" align="aligncenter" width="200"] Bodies of Japanese Candles[/caption]

The shadows that appear above and below the Japanese candles offer important information about the session.

The shadows above mean the maximum of the session. And the shadows below indicate the minimum prices of the session.

Candles with long shadows indicate that prices throughout the session were quite far from closing and opening prices.

Candles with short shadows indicate that prices remained close to closing and opening prices.

[caption id="attachment_674" align="aligncenter" width="296"] Bodies of Japanese Candles[/caption]

If a candle has a long shade from above or below, it means that prices ranged from one end to the other, causing a significant variation in prices and a major dilemma between bulls and bears.

NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future.