Candle Types

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    Keith Bowtell

    Hi Rich

    I am a member of the OMT Trader group so sticking with FOREX pairs for now

    Can you explain why or give your thoughts on the differend types/shapes of candles

    I keep gettng trades knocked out by what I call “Spike” candles, these have a small boddy, say 5pips between opening and closing prices but may have a very long wick, say 30 – 50 pips. These tend to hit my SL and close trades only for the price to shoot back up. Is there any rational thinking behind this huge price swing, especially on the M15 scale.

    is there any way to protect a trade against this, apart from having a very loose SL

    Thoughts on other candle types would be helpful in trying to understand past trading paterns







    Rich FittonRich Fitton

    Hi Keith,

    The thing to remember about candlesticks is that although they give a visually striking image, they are only illustrating the movements of the market – the changing power dynamic between the buyers and sellers – over a specified period of time.

    With the spike candles you have noticed, it has been a case of the downside pressure quickly being absorbed and overpowered by the buyers all inside that 15 minute period. It could be down to the reaction to news items – have you checked the economic calendar to see if any releases correspond to the times this has happened? Is it one particular market you have been working in when you have experienced this?

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