Long Black and Long White Candlestick

As we've discussed before, the existence of long white candlestick is indicate the occurrence of excess of demand that quite strong in observation period.

A long white candlestick will be more significant its impact if its emergence is accompanied by an increase of volume of transactions.

In the formulation, the emergence of long white candlesticks can be identified as follows;

Long White candlestick
if candlestick body >= mlt* Average candlestick body
and
upper shadow <1/{mlt)* Average candlestick body
and
lower shadow <1/{mlt)* Average candlestick body
and
upper shadow <> 0
and
lower shadow <> 0
and
close price > open price

Long black candlestick
if candlestick body >= mlt* Average candlestick body
and
upper shadow <1/{mlt)* Average candlestick body
and
lower shadow <1/{mlt)* Average candlestick body
and
upper shadow <> 0
and
lower shadow <> 0
and
close price < open price

Long white candlestick is a candlestick with the closing price (close) larger than the opening price (open) and has a body length greater than or equal to the multiplier that multiplied with the averages of body length with upper and lower shadow is short or very short (upper / lower shadow are smaller than 1/multiplier * the averages of body length). Upper and lower shadow should have the value or not equal to zero.

Long black candlestick is a candlestick with the closing price (close) smaller than the opening price (open) and has a body length greater or equal to the multiplier that multiplied with the averages of body length with the upper and lower shadow which short or very short (upper / lower shadow are smaller than 1/multiplier * the averages of body length). Upper and lower shadow should have the value or not equal to zero.

Well, now we have been able to do identification the emergence of long black or long white candlestick pattern, now the question is whether the recommendations can be generated by a long white / black candlestick pattern? What is thus for example the emergence of the long white candlestick than we can see an indication that the price will continue to rise in the next period?

Since the emergence of a long white candlestick is a description of the situation of excess of demand than its emergence in general will give indication the possibility of occurrence of uptrend or bullish trend any kind of that preceded, either if the emergence of the long white candlestick begins with downtrend, uptrend or sideways. The emergence of a long white candlestick, which is preceded by uptrend would be an indication of bullish trend continuation.

The emergence of a long white candlestick, which is preceded by a downtrend would be a bullish indication, while the emergence of long white candlestick which is preceded by sideways trend would be a bullish indication with special conditions, namely if the close price of the long white candlestick in question can penetrate the resistance point of the sideways trend that formed.

In general, the point of support of a long white candlestick information is at:
1. If the emergence of a long white candlestick is preceded by a uptrend or downtrend then support point will be at:
a. Close price of the long white candlestick concerned
b. The midpoint of the long white candlestick body concerned
2. If the emergence of a long white candlestick preceded by a sideways trend, then the support point will be at the limits of the level resistance of sideways trend that preceded it.

If the long white candlestick is a bullish indication or uptrend, then the emergence of a long black candlestick is contain information with the opportunity of emergence of decreasing trend (if long white candlestick is an indication of excess of demand, then long black candlestick is an indication of excess of supply). Hence, whatever the type of trend that preceded it, the emergence of a long black candlestick would be an indication of the creation of trend bearish or downtrend.

The emergence of a long black candlestick on the end of an uptrend indicates the occurrence of bearish trend. The excess of supply that arising from the emergence of long black candlestick formation at the end of a uptrend due to profit taking by investors who have been holding a long position in advance.

Furthermore, the emergence of a long black candlestick that preceded by downtrend will be an indication of bearish trend continuation. While the emergence of a long black candlestick, that preceded by the sideways trend would be an indication of bearish with special conditions if the close price of the long black candlestick concerned is able to penetrate the point of support of the sideways trend that preceded it.
In general, the point of support of a long white candlestick formation is at:

1. If the emergence of a long black candlestick preceded by uptrend or downtrend then the resistance point will be at:
a. Close price of the long black candlestick concerned.
b. The midpoint of the long black candlestick body concerned.
2. If the emergence of a long black candlestick preceded by sideways trend, then the resistance point will be at the limits of support level of sideways trend which is preceded it.

Despite bullish or bearish indications generated by long white or black candlestick is not affected by the trend that preceded it (long white candlestick is always indicate bullish and long black is always indicate bearish). However, to complete the analysis, we still have to do the calculations and identify to the trends that preceded primarily associated with interpretation bullish or bearish trend regarding the emergence of a long candlestick formation that preceded by sideways trend.