What Is Wick In Crypto Trading?

What are wicks, and how to read them on charts? These are the questions we will answer in this article.

What Is A Wick On A Chart?

Wicks (also known as “shadow” or “tail”) are vertical lines on a candlestick chart that help visualize the high and low price ranges of an asset over a timeframes. These lines help traders determine trend movement and the mood of the overall market before they start trading.

Below you can learn more about what wicks on charts are for and how to read them.

What Do Wicks Indicate?

Wicks highlight price extremes, letting traders better comprehend market sentiment and momentum within the timeframe. This means that as the price fluctuates relative to the open and close prices, wicks are generated to depict the movement.

How To Read Wicks On A Chart?

Let's now take a closer look at wicks and learn how to read charts. When reading a chart, traders should focus on the opening price, closing price, and the high and low wicks; this will help them interpret the candlestick chart correctly. If the long wick is on top of the main candle, it indicates that the price went up and then came back down. This means that there may have been increased selling pressure in the market, which is also known as a market reset.

On the other hand, if the long wick is below the candle, it indicates that the price has fallen and went back up. This indicates an increase in buying pressure, leading to possible price increases. In addition, there is a possibility of a candle without a wick. These candles resemble a square or rectangle because the closing and opening prices correspond with the candle's maximum and minimum marks.

By learning to read the wick correctly, a trader can make a countertrend by moving quickly in the opposite direction of the wick. However, it is important to know that for best results, you should only use candlestick wick reading in conjunction with other technical analysis tools and strategies.

Wicks are a valuable tool for crypto traders, as a wick allows you to understand the mood and momentum of the market. By understanding how to read wicks, traders can make more informed trading decisions and potentially increase their profits.

Was this article useful for you? Write about it in the comments.