High Wave Candlesticks

How to Trade a High Wave Candlestick

High-wave candlesticks are indecision candlesticks that look like long-legged dojis. They have long lower shadows and long upper wicks. They also typically have a larger real body and can be found near support, resistance levels, and consolidation areas. High wave candles could be bullish or bearish. 

A high wave candlestick consists of a small to medium size body with long upper wicks and shadows. They are an indecision candle, often signaling potential reversals. They can be found in up-and-down trends and are bullish or bearish coloring on stock charts.

High wave candlesticks show a stock that is plagued with indecision. Emotions move markets. Japanese rice trader Homma realized this factor a long time ago.

High Wave Candlesticks


High wave candlesticks look similar to doji candlesticks. Getting caught up in the minutia of reading the exact form of candlesticks is unimportant because of the similarities in indecision candles. Like the doji, a high wave candle tells a story of indecision.

This candle has a small real body with long shadows from the top and bottom of the real body. This says there is a lot of volatility with the uncertainty.

High wave candlesticks, as an illustration, tell the story of the market having difficulty coming to a consensus on the value of a stock. Put another way, the bulls and the bears are confused about where the stock is headed. 

So, if a high wave candle is paired with high stock volume, traders are letting you know they are confused about where the stock is headed. 

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Trading High Wave Candlesticks

  • Traders take a long position when the price breaks above the candlestick’s high.
  • They use a candlestick close below the low as a stop level.
  • They take a short at the break of the low and use a candlestick close above high as a stop.

Final Thoughts

High wave candlesticks happen because traders are confused about the direction of a stock. If you see that form on a chart, waiting a day or two before placing a trade is probably smart.

Wait for the confirmation of where the stock will head. Let the following candlesticks form and see what direction the stock decides to head in, as well as watch the nine ema to confirm a trend. Trading high wave candles can be tricky at times.

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