Bulls and bears are always fighting for the control of the market. Candlestick charts are the best way to know who is controlling the market. With one glance on the candlestick chart, you can find out whether the bulls were in control or the bears. There are many candlestick patterns. The most basic and the most powerful candlestick pattern is the the long white candle. When this candle is formed, it means that bulls have been controlling the market throughout the day pushing the currency prices or the security prices higher throughout the trading day. This is one of the most bullish candlestick pattern to form on the chart!
As prices rise through the day, sellers do come in but not enough to stop the prices from continuing to rise. When sellers do show up during the trading day, buyers buy from them and the prices move higher.
Now, what this means is that prices have been constantly rising throughout the trading day. The closing price was equal to the high of the day or very near the high of the day. This is an indication that the buyers are not done with their buying. The following day the bulls will still be in control and pushing the prices further higher. This is an indication of the fact that there are not enough stocks or securities in the market to satisfy the buying appetite of the investors. With high demand and low supply, the prices will continue to rise!
Now, a true White Marubozu is a special variation of the long white candle with the closing price equal to the high of the day and the opening price equal to the low of the day. However, a White Marubozu may not be formed quite frequently on the chart. Most of the time, you are going to find the white long candle with a wick on either side of the candle body. These wicks will be small offcourse. What this indicates is that the closing price was close to the high of the day but not equal to it. In the same way, the opening price was close or near to the low of the day but not equal to it!
How do you know that this is indeed the white long candle? When you find that 90% of the area between the low and high of the day is covered by the candle body, you know that this is indeed a long white candle. You wil find many bullish white candles on the chart. Off course, everyone will not be the white long candle.
On a long white candle day, a lot of price action is covered by a very short amount of time. Price action doesn’t move in one direction for that matter without retracing some part of it. This normal retracing of the price action gives you a chance to act on the signal provided by the bullish long white candle.
With long white candlesticks, the low price on the candlestick is a good support level. Support is the level where the buyers are expected to support the price of the stock or for that matter the security.
There are some variations to the bullish long white candle. Three are very important. The first is the Long White Marubozu that has no wick. It is all candlebody. This is the most bullish of the candlestick patterns. The other variation is the Closing White Marubozu. In this case, the closing price is equal to the high of the day. What this means is that there is no wick on the top of the candlebody.The third important variation is the Opening White Marubozu. In this case, the open price is equal to the low of the day. What this means is that the there is no wick below the candle body.
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