Long Wicks

This is just my observation and I've probably read it somewhere on something more than once.

Long wicks are testing to see if they can get buyers (or sellers), simply put. Today I saw multiple times where there were long wicks to one side and verbalized what was happening. However, somewhere some fear gripped me as I had positions on the table and allowed myself to get caught up in the emotion.

What was happening was they were what seemed like an indecisive point, but in the grander scheme of things, it looked like the direction was still long at the time. Unfortunately, I allowed myself to get shaken out of my position and reversed it. As soon as I did that, I recognized that I was wrong and this cost me to take 2 hits that cost me.

My original thoughts were correct. I had a resistance line drawn and after it shook out the sellers, it went to tag that resistance line and came back down from there. That was actually my original play and yet, somewhere because money was on the line, I allowed it to influence my judgement. Not a good thing.

Of course, if the candle you're looking at and the wick hasn't formed, but you know where the pivots are, which often are the moving averages or other pivot areas where there is greater congestion (what this means is if this is an area the price action has stopped at numerous times either as a support or resistance, the likelihood of this occuring again is higher), you can look at volume to see what may be happening.

If they can't bring buyers in, then the price will drop. Vice versa. The points of compression or what appears to be indecision really isn't because they are more tests.

Long wicks test.
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