Shaved Top and Bottom Candles

May 10th, 2010, 09:49 PM

Hello,

I've been looking at various indicators and toying with custom indicators over the past few weeks to try to see what other indicators "point" to the conditions where candles in succession have shaved tops or bottoms.

See the highlighted sections in the charts below - tick and range charts.

I'm trying to identify what indicators (if any) would give a good "heads up" signal when a shaved head or bottom appears ("good" being a subjective term, haha).

Here's a one of many resources if you wanna read up on this...
https://www.tradingstrategies.com/index.aspx?page=japanese_candlesticks_3

Any Thoughts?

kz

May 11th, 2010, 11:50 AM

Interesting. My first question would be, is this 'valid' on range bars? Many chart patterns don't work on a fixed range bar.

Mike

May 11th, 2010, 12:41 PM

I've struggled with looking at this with respect to range bars too. I'm not sure if it would be valid, I'm actually surprised when I see wicks of a certain size on range bars or total reversals where bullish and bearish candles are side-by-side and the median price of those bars has barely moved. That's part of the reason I've shown it on tick charts (doesn't happen often on minute bars but I'm looking into that too.

Any thoughts are welcome.

Thanks,
kz

Shaved Top and Bottom Candles

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Shaved Top and Bottom Candles