In the high wave candlestick technical analysis, the stock is exhibiting a lot of indecision. Bulls and bears battle it out in the stock market.

High Wave Candlestick:

High wave candle consists of a small to medium size body with long upper wicks and shadows. High wave candle are an indecision candle. Many of times they are signalling potential trend reversible patterns. High wave candlestick patterns can be found in both up trends, down trends and are bullish or bearish colouring on stock charts.

Construction of the High Wave:

  • either a black or white body
  • very small body
  • must have at least one shadow
  • looks like a long line
  • at least one shadow is longer than the body by at least three times
  • like the Long-Legged Doji

Construction of the High Wave: either a black or white body – very small body – must have at least one shadow – looks like a long line – at least one shadow is longer than the body by at least three times – like the Long-Legged Doji As with many other candles with very long shadows, High Wave indicates that market fluctuations are very rapid, which may threaten the current trend.

Candlesticks, as in so many cases, are heavily influenced by the market context. As is the case with the spinning top, the importance of a high wave depends on what is happening on the chart. According to Morris, it may indicate a change in trend. If it occurs after an explicit trend (downtrend or uptrend) and is accompanied by an increased volume, its significance will be greater.

Don’t trade too many markets with too little capital

– Antoroy

Inverted high wave candlestick pattern:

Inverted high wave candlestick patterns have a small to medium size body with long upper wicks and shadows in the low trend. High wave candles represent indecision. They often indicate potential trend reversible patterns at the bottom of a low trend. High wave candlestick patterns can be found in both up and down markets and are either bullish or bearish in color.

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High Wave Candlesticks: How Does It Work?

High wave candlesticks have a very small real body, and they signal an uncertain stock or index.  With the spinning top, the upper and lower shadows are small, whereas with the high wave, the shadows are longer, indicating more volatility.

The high wave candlesticks signify that the market is having difficulty arriving at a consensus on a security’s value. They are indicative of an uncertain and indecisive market. Neither the buyers nor the sellers are sure of the direction the market will take. Supply and demand are equally balanced.

The presence of a high wave candle on high volume indicates the market is confused about the direction prices are heading.

What is the significance of a high wave candlestick?

“When in doubt, stay out.” The high wave candle indicates doubt and confusion on the part of the market. While the situation is unclear, traders should focus on careful stock selection and minimize position sizes.

A high wave candlestick can be found just about anywhere on a stock chart, just like the Spinning Top candlestick. In the middle of a move, the High Wave is usually part of a continuation pattern. It can, however, signal a reversal if found at the top of an upward trend or at the bottom of a downward trend. Prior to making a trading decision, it is a good idea to see how the market moves on the next period candle.

Gratia Mario

The founder of traderma.com has 15 years of experience in the financial markets. She aims to make trading and investing easy to understand for everyone, and she has been interested in developing the money management techniques.

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Gratia Mario

The founder of traderma.com has 15 years of experience in the financial markets. She aims to make trading and investing easy to understand for everyone, and she has been interested in developing the money management techniques.

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