A candlestick chart is a technical analysis tool that provides a visual representation of a given crypto asset’s price movement over a certain period of time. Some of the key components of this chart are wicks – learn more about them below.
What Is A Wick?
The candlestick pattern is formed using the open, high, low, and close prices of a market. The body of the candlestick is usually represented by the rectangular portion, while the lines extending from either end are the wicks.
A wick can also be referred to as a whisker, shadow, or tail. It displays the price fluctuations of an asset in relation to its opening and closing prices.
What You Need To Know About Wicks
As you might have understood from the wick definition, it is essentially a visual aid on a candlestick chart that represents the high and low range of price action. If the candlestick body and wicks are colored red (or black), it means that the price of the asset declined during the given period, whereas green signifies that the price increased.
A chart with a 10-minute segment per candle where the price opens at $5, falls to $1, rises to $15 and closes the 10-minute timeframe at $10, would feature a green candle with a wick from $1 to $5, a solid green body candle from $5 to $10, and a wick from $10 to $15.
A wick’s length indicates the extent of the price movement. For instance, a long wick at the bottom of the candle signals that the price dropped significantly before it rebounded and the candle closed, which means that buying pressure overtook selling pressure. Due to this, some technical analysts view a long wick as a sign of a price reversal.
On the other hand, there are also wickless candles that appear as squares or rectangles on a chart. This occurs when the opening and closing prices align with the high and low marks of the candlestick, resulting in no wick being present.
