A full body candle refers to a candlestick that has no shadow above or below its body, and its body is entirely between the opening and closing prices of the time period. This characteristic indicates the dominance of one side of the market. For example, if this candle appears in an uptrend, it signals the complete control of buyers and a continuous increase in price. Conversely, in a downtrend, this candle signifies the dominance of sellers and a continuous decrease in price.
For instance, imagine in an uptrend, a candle forms with an opening price of 100 and a closing price of 105, with no shadows. This candle shows the strong power of buyers who were able to move the market upward without any price retracement. Such a candle can be a strong signal for the continuation of the uptrend.
Types of Full Body Candles and Their Applications
Full body candles generally have two main types: bullish full body candles and bearish full body candles. Each of these candle types provides different signals to traders, which can be very helpful in predicting the next price movement.
Bullish Full Body Candle
This candle forms when the closing price is higher than the opening price, and there are no shadows at the top or bottom. In other words, this candle indicates the complete dominance of buyers in the market. When a bullish full body candle appears in an uptrend or at the end of a downtrend correction, it can indicate the continuation of the uptrend and strong buying power. Traders use this candle as a strong buy signal.
When this candle appears in an uptrend, it can serve as confirmation for the continuation of the trend and an ideal opportunity to enter the market.
Bearish Full Body Candle
This candle forms when the closing price is lower than the opening price, and there are no shadows at the top or bottom. This type of candle indicates the dominance of sellers and is usually observed in downtrends or at the end of an uptrend correction. This candle signals to traders that sellers are in control of the market, and the price will likely move downward.
When this candle appears in a downtrend, it is a signal for the continuation of the downtrend, and traders may consider it an opportunity to sell or enter the bearish market.
Whether bullish or bearish, the full body candle is a very useful tool for market analysis. It helps traders receive clearer signals about market strength. These candles can play an important role in confirming trends or identifying market direction changes and can be effectively used in trading strategies.
Full Body Candle in Forex
Using a full body candle in Forex can be a powerful tool for identifying market trends and making trading decisions. These candles typically indicate the strength of one side of the Forex market (buyers or sellers) and help traders identify appropriate entry and exit points.
Identifying Market Trends
The full body candle is one of the first signals used by traders to identify market trends. If a bullish full body candle (with a large body and no shadows above or below) forms in an uptrend, it can be interpreted as confirmation of the continuation of the uptrend. Conversely, if a bearish full body candle appears in a downtrend, it indicates the continuation of the downtrend.
For example:
In the EUR/USD currency pair, a bullish full body candle with a long body forms on the 1 hour time frame. This candle signifies the complete dominance of buyers in the market and can serve as a signal for traders to enter a buy position, especially if it appears after a short term downtrend correction.
A Tool for Confirming Entry and Exit Points
The full body candle is used as a confirmation signal for entering or exiting Forex trades. Therefore, if you are a trader following an uptrend and a bullish full body candle appears, it can be a signal to enter a buy position. On the other hand, if you are following a downtrend and you see a bearish full body candle, it can confirm an entry into a sell position.
Choosing the Right Time Frame
This candle is generally a powerful and accurate tool for entry or exit for traders who follow a long term trading strategy, such as using multi hour or daily time frames. On the other hand, a full body candle might appear as a false or unstable signal in short time frames, such as one minute or few minute time frames.
Proper use of this candle, alongside other analytical tools and in the right time frames, can assist traders in making more accurate and profitable decisions.
Trading Like a Professional with Full Body Candles
Forex professionals widely use full body candles to identify entry and exit signals and confirm trends. Due to their specific characteristics, these candles generate strong and reliable signals in both volatile and trending markets. Some of the most important and common techniques that Forex professionals use with full body candles include:
Combining Full Body Candles with Support and Resistance Levels
Professionals often use full body candles to confirm the breakout of support and resistance levels. When the price reaches a significant support or resistance level and a full body candle forms at that level, this signal can indicate a breakout of that level and the continuation of movement in the direction of the breakout.
Using Full Body Candles in Combination with Momentum Indicators
Professionals often use full body candles in combination with momentum indicators such as RSI or MACD to confirm the strength of price movement. When a full body candle forms in the direction of the dominant trend along with a signal from momentum indicators (such as RSI not indicating an overbought or oversold condition), it can be a strong signal for entering the market.
Using Full Body Candles to Identify Reversal Points
Full body candles can also be very useful for identifying market reversal points. When these candles appear at the end of an uptrend or downtrend, they can indicate a change in direction or the beginning of a reversal movement in the market. Professionals consider these candles as a sign of trend reversal and use them to enter reverse positions.
Due to their specific characteristics, these candles provide accurate and reliable signals in the market, which can significantly improve trading decisions. Combining these candles with other technical analysis tools, such as support and resistance levels, indicators, and chart patterns, can enhance the accuracy and reliability of the signals.
Advantages and Disadvantages of Full Body Candles in Forex
Full-body candlesticks are among the most noticeable and informative patterns in Forex technical analysis. Due to their large, solid candle body and minimal wicks (or none), they typically indicate strong momentum and clear dominance by either buyers or sellers. These candles often provide traders with clear, actionable signals, especially in trending markets.
Advantages of Full-Body Candlesticks
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Indicate strong directional momentum
A full-body candle shows that price moved consistently in one direction throughout the session, with little to no retracement. This often signals that either the bulls or the bears had full control, making it easier to assess trend strength. -
Provide fast and clear signals
Because of their simple yet powerful appearance, full-body candles allow traders to interpret market conditions quickly. When seen at key levels, they can serve as straightforward entry or exit signals. -
Useful in both continuation and reversal setups
Depending on their context, full-body candles can indicate trend continuation or serve as confirmation in reversal zones. When combined with support/resistance or price action patterns, they are a valuable tool in any trader’s strategy.
Disadvantages of Full-Body Candlesticks
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May produce false signals in choppy markets
In volatile or sideways conditions, full-body candles can misrepresent market strength. A sudden move may form a full-body candle that doesn’t reflect a sustainable trend, leading to poor trade entries. -
Less reliable in lower timeframes
In timeframes like M1 or M5, a full-body candle may simply reflect a momentary fluctuation rather than true market momentum. This makes them less dependable without higher timeframe confirmation. -
Require confirmation from other tools
While strong on their own, full-body candles are most effective when used alongside other technical indicators such as volume, trendlines, or support/resistance levels. Relying solely on the candlestick shape without broader context increases the risk of misinterpretation.
Factors Affecting Full Body Candles
One of the main factors influencing the formation of full body candles is market volatility. Sudden price changes and the dominance of one side of the market, such as buyers or sellers, can be attributed to highly volatile periods and significant economic news, which are the primary factors influencing full body candles.
Another factor affecting full body candles is trading volume. When trading volume is high, the pressure from buyers or sellers increases significantly, and a full body candle may appear as a representation of the dominance of one side of the market during that specific period. These signals are generally more reliable in longer time frames.