What can you interpret from the tail of a candlestick? How can you know if the buyers or sellers have left the market after taking profit? For example, look at EUR/USD chart. The support and the resistance levels are marked by horizontal lines. As you can see from the chart, some candlesticks make long tails at these key levels. It indicates a profit taking by the traders.
For example, after the ruling by the German court to sort out the QE program in three months time by the ECB, the euro got sold off. After that, the market makes candlesticks with long tails at this support level to indicate the profit taking by the sellers. So, once again the price reverses to the upside.
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