Long wick = reversal? Not always

You saw a long wick and bought. Then price kept falling.

A long wick only works in the right place. Here's where.

First, the shape. A long lower wick and a small body. Sellers pushed down, buyers pushed it back.

That shows price got rejected. But where it happens matters more than the shape.

Look at this silver chart. A long wick, down to 58.38.

But it's in the middle of nowhere. No support under it, just the middle of a move.

Buyers who trusted it got hurt. A few candles later, price closed below the wick.

Now look here. Silver dropped to the same area three times. That's support.

Then this candle. A long wick right at support, closing near its high.

That's a real rejection. Buy if the next candle breaks its high, with your stop below the wick.

Silver then climbed above 60.

Save this. Long wick at a key level: a real signal. Long wick in the middle of nowhere: ignore it.

Your turn. Long wick on this pound chart. Signal or noise? Comment below.

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