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Figure 1. Short White Candle (basic candle).
Forecast: reversal or continuation of the trend
Trend prior to the pattern: n/a
Opposite candlestick: Short Black Candle
Construction:
- white body
- required lower and upper shadow
- none of the shadows can be larger than the body
- appears on as a short line
The Short White Candle belongs to the basic candles group. It can very often be seen on the charts, though not as often as a regular White Candle. As stressed in other articles, during the analysis, it is very important to take the market context into account. Short candles occurring after a strong trend composed of long candles can indicate only a temporary correction, especially if there are a few of them in series (alternating white and black). The Short White Candle can also be part of candlestick patterns, signaling a trend reversal (e.g. Last Engulfing Bottom, Morning Star, Descending Hawk).
Its appearance in an uptrend may suggest a continuation of the trend, but it can also be a part of a pattern announcing its reversal. When this type of candle occurs in a downtrend, it may be part of the bullish reversal pattern.
Figure 2. The chart shows how, depending on the time scale, it can be misunderstood whether the candle is short or long. At first glance, it seems that the candle has a long body, but compared to the previous lines, it is in fact short . Using different colors for long and short lines solves the interpretation problems.
