Special candle shapes
Every trade needs both a buyer and a seller. Price rises when buyers are willing to pay higher prices, and it falls when sellers are willing to accept lower prices. This buying and selling pressure can be seen in the shape of a candle.
The chart marks three daily Bitcoin candles as A, B, and C. Before reading further, compare their bodies and notice where each candle closed.
3 March 2023
Strong selling pressure: tall red body
12 March 2023
Strong buying pressure: tall green body
5 April 2023
Doji: open and close are very close
Candle A has a tall red body and closed near its low. It shows strong selling pressure during the day. Candle B has a tall green body and closed near its high. It shows strong buying pressure during the day.
Candle C is a doji. Its open and close are almost equal, so neither side moved the closing price far from where it started. Price-action traders compare shapes like these with nearby candles. The next chapter adds volume to show how much trading activity took place during a candle.
Which candle shows the strongest selling pressure?
Choose one answer.