WEBVTT 00:02.840 --> 00:10.880 And this video, how to trade long and short candles, so candlesticks, as you can see, change shape 00:10.880 --> 00:16.190 and come in all different sizes, have Tyson Foods daily in front of you. 00:16.190 --> 00:18.830 But this could be any charter really doesn't matter. 00:19.670 --> 00:21.650 There's a couple different things that you should think about. 00:22.250 --> 00:26.340 The length of the candlestick does, in fact, matter. 00:26.390 --> 00:27.980 So on this daily chart. 00:29.070 --> 00:31.590 You can see that we had been trending lower. 00:32.940 --> 00:41.010 But think about what these candlesticks mean that are longer than many of the other ones. 00:42.900 --> 00:44.970 And in this case, negative. 00:47.170 --> 00:53.020 There are three, for example, there are three days here which only make up about half of this distance. 00:53.800 --> 00:54.760 So what does that tell you? 00:54.880 --> 01:00.040 It shows that there's real conviction that day to the downside, because not only did we form a lone 01:00.040 --> 01:02.890 candlestick, but we closed towards the bottom of the candlestick. 01:02.890 --> 01:09.220 Generally, the the bottom quarter is pretty negative sign, just as the top quarter of a green candlestick 01:09.220 --> 01:10.720 is generally positive. 01:12.650 --> 01:18.480 But you also want length and there is no hard and fast rule for this, it's just common sense. 01:20.120 --> 01:20.960 So, for example. 01:22.980 --> 01:27.930 I just said that closing at the top three quarters of a candlestick is a bullish sign. 01:29.970 --> 01:35.010 It doesn't mean that it works every time that the buyers are going to continue to take over, but. 01:37.130 --> 01:43.850 So after this candlestick, we had a gap and gaps tend to represent a lot of either buying or selling, 01:43.850 --> 01:44.750 in this case selling. 01:46.580 --> 01:52.350 And we had a couple green candlesticks formed after this massive one that closed towards the top. 01:52.380 --> 01:55.100 Now that could be thought of as somewhat bullish. 01:55.610 --> 01:57.260 But think of it this way. 01:57.270 --> 02:02.840 It took two of them just to get back all of the losses from this one candlestick. 02:03.530 --> 02:04.580 And that's the point. 02:05.300 --> 02:08.540 Just like over here, this candlestick was very negative. 02:08.540 --> 02:13.880 And even though we popped above it, you can see that we saw more selling later. 02:15.520 --> 02:19.750 So with these long candlesticks, it shows that something. 02:20.980 --> 02:26.290 Either has fundamentally changed or has been in this case confirmed as we were following. 02:27.420 --> 02:38.160 So let me pop up another random chart to city here, you can see that we have several negative candlesticks 02:38.160 --> 02:44.340 followed by declines, but we also have several positive candlesticks like that, followed by markets 02:44.340 --> 02:45.870 accelerating to the upside. 02:47.300 --> 02:52.430 For example, this candlestick here wiped out three or four days of trading and we shot higher from 02:52.430 --> 02:58.160 there, just as we had a couple of really negative ones, and then it started to decline. 02:59.520 --> 03:00.720 Go to JPMorgan. 03:01.940 --> 03:08.390 And you can see that this really bullish candlestick here wiped out three or four days of negativity 03:08.960 --> 03:10.340 ahead of it and one. 03:12.270 --> 03:19.500 Massive move in what would have been a slightly positive trend anyway, so that makes sense that we 03:19.500 --> 03:20.220 would go higher. 03:22.330 --> 03:23.140 When you see. 03:24.580 --> 03:26.780 A cluster here and then a sudden flush. 03:26.830 --> 03:28.070 That's a very negative sign. 03:28.090 --> 03:33.320 Look at how negative this candlestick is in comparison to this range. 03:33.340 --> 03:35.860 I mean, we wiped out that entire range in one candlestick. 03:35.890 --> 03:41.650 So to keep that in mind, that really shows conviction. 03:41.650 --> 03:44.560 That shows a lot of money coming into the market now. 03:44.740 --> 03:49.240 On the other end, you have short body candlesticks. 03:50.620 --> 03:52.510 And they generally mean in decision. 03:54.140 --> 03:55.910 What you want to see is. 03:58.110 --> 04:05.970 Short candlesticks followed by some type of massive negative candlestick like that, so it's not the 04:05.970 --> 04:12.540 short candlesticks that are the signal themselves, but it tells you that you want to see momentum pick 04:12.540 --> 04:17.070 up in one direction, that maybe the market is trying to wind up a little bit. 04:19.070 --> 04:19.700 The. 04:22.390 --> 04:26.350 Long wicks can mean things, so, for example. 04:28.350 --> 04:37.140 Think about what this candlestick here means, that long wig suggests that the buyers came in but gave 04:37.140 --> 04:38.510 up quite a bit of the gains. 04:39.270 --> 04:41.440 Well, that's not a good sign. 04:41.460 --> 04:44.460 That means we could not keep up the momentum to the upside. 04:44.460 --> 04:48.930 And that, in fact, is a bit of a reversal signal in this case, a shooting star. 04:50.270 --> 04:57.080 Just as this is a hammer, so when this candlestick here on this day, we were at extreme lows, we 04:57.080 --> 04:57.890 had fallen. 04:58.850 --> 05:08.350 And did that, so this shows that everybody who had shorted this candlestick down below 107 dollars 05:08.360 --> 05:14.570 was now underwater, and then once you got this very positive and bullish large candlestick after it, 05:14.930 --> 05:16.490 more people started to lose money. 05:16.490 --> 05:18.380 And you can see we just took off to the upside. 05:19.070 --> 05:22.070 These are things that you need to think about when you're looking at these candlesticks. 05:22.400 --> 05:24.150 You need to think about who's in trouble. 05:24.200 --> 05:27.440 There are people trapped when you get a huge move like that. 05:28.750 --> 05:36.580 The sellers here were trapped, and in order to get out of a negative situation, you need to buy that 05:36.580 --> 05:37.260 stock back. 05:37.270 --> 05:42.850 So not only are they losing money, they have to push the market higher to close out all of those short 05:42.850 --> 05:44.190 positions as well.