C H A PTE R The Six Basic Candlesticks mong the dozens of candlestick formations, there exist many combinations of the six basic candle- sticks. These are: 1. Long candlesticks. The long candlestick indicates a lot of momentum among buyers (long white) or sellers (long black). When there is little or no shadow, the long candlestick is defined as a marubozu. The lack of shadow indicates exceptional strength for one side or the other, because price opens or closes at the opening or closing price without further extension. A marubozu may have no shadows, or a small one at the top or at the bottom of the real body. The significance of the long candlestick relies com- pletely on placement. For example, a long white can- dlestick appearing within an uptrend is a strong re- versal indicator, but if the same candlestick appears after a downtrend, it is more likely to act as a reversal signal. The same is true for long black candlesticks. Within a downtrend, it tends to confirm, and when it follows an uptrend, it is more likely to signal reversal. A long candlesticks long white long black white marubozu black marubozu KEY POINT: A long candlestick does not always mean the same thing; it depends on where it appears. If it contradicts the direction of the prevailing trend, it signals reversal; if it conforms to the direction of that trend, it is a continuation indicator. 2. Short candlesticks. A candlestick with average or relatively small extension signals indicates a gen- eral agreement between buyers and sellers that the current price is reasonable, especially when short candlesticks appear in a series of sideways-moving sessions. However, when short candlesticks appear following a period of strong trend in either direction, 31