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Wick

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What Is a Wick?

A wick, also referred to as a shadow or tail, is a line visible on a candlestick chart that denotes the price range of an asset within a specific time period. It signifies the highest and lowest prices attained during that timeframe, extending from the body of the candlestick.

Role of Wicks

Candlestick Components: While the body represents the opening and closing prices, wicks display the price extremes.

Market Sentiment: Lengthy wicks have the potential to indicate impending reversals. A lengthy lower wick suggests buying pressure following selling, whereas a lengthy upper wick signifies selling pressure subsequent to buying.

Significance in Trading

Wicks aid traders in comprehending market sentiment and momentum. Extended wicks can serve as indicators of potential price reversals, thus facilitating technical analysis. Nonetheless, it is vital to analyze wicks alongside other indicators for precise market forecasts.

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