Most of us gets carried away by the colour of candle but one need to read in between the whole body of candle.
Please note that it is not just the colour of
a candle's body that decides the degree of bullishness or bearishness in a given candle.
The size of the body matters as well, and so does the size of the candle's tails or shadows.
For example, a small green candle with a long upper tail is more bearish than a red candle.
These shadows, or tails as they are also often called, do indeed have a tale to tell. These are the lowest and highest price levels reached during the period concerned.
It takes bull power to take the price from its lowest value to a closing value above this low.
Higher the bull power, bigger is the pull-back from the low, and thus longer the lower tail or
shadow.
Correspondingly, it takes bear power to force down the price from the highs of
the given period to a closing value which is lower than that high. Thus, a longer upper
shadow means that the bears could force the prices that much lower from the highs before
the candle closed.
If you grasp this concept clearly, then you will understand that a small red candle with a
longer lower shadow is more bullish than a small green candle with longer upper shadow and vice versa
Hope you have understood that one need not get blinded by colours and do a thorough analysis of a candle to arrive at a conclusion that it is bullish or bearish.
You can make money using our daily bank nifty option strategy as we have been voted as #1 Bank Nifty tips Provider in India.
You
should Trade Less But Trade Accurately & this is Achieved with our Tip.
