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Forex What does a candlestick with a particularly long body signal?

Discussion in 'Forex Forum' started by Ponzi Jr, Feb 12, 2016.

  1. Ponzi Jr

    Ponzi Jr Guest

    Suppose you were looking for an opportunity to trade a trend reversal and saw a candlestick with a particularly long real body, in the direction of the trend. Would this signal that

    1. The market still has a lot of momentum in the direction of the trend, so a reversal is unlikely?
    2. The market is overextended and a reversal is likely?

    I have seen both of these interpretations of a long bodied candlestick suggested in Steve Nison's book 'Japanese Candlestick Charting Techniques', which seems contradictory. Can anyone please help me to understand this?

    Source.
     

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