[Summary]
A wrapper is a pattern in which the next candlestick moves significantly, wrapping around the previous candlestick.
It is attracting attention as a sign of a trend reversal, as it indicates the possibility that the market momentum has tilted in the opposite direction.
However, it is dangerous to make buying and selling decisions based solely on the wrapper. We look at the high price area, low price area, trading volume, and materials together. It is also important to be able to maintain the value after wrapping.
What is a wrapped foot?
A wrapper is a pattern seen with two candlesticks.
This refers to a shape in which the second entity grows to encompass the first entity.
If after a decline, a large positive line wraps around the previous day's negative line, there is a possibility that buying has strengthened. On the other hand, if a large negative line wraps around the previous day's positive line after a rise, selling may have strengthened.
View of wrapped legs
| type | Places that are easy to get out of | general view |
|---|---|---|
| The wrapped legs of the sun | low price range | Possibility of rebound/upturn |
| shadow wrapped feet | high price area | Possibility of decline/downturn |
What matters is where it comes from.
Even with the same package, the meaning changes greatly depending on whether it exits in the bottom price range or in the high price range.
Points that beginners should note
The wrapped foot has an easy-to-understand shape, so beginners will want to use it as a buying and selling signal right away.
However, if the trading volume is low or the overall market condition is weak, it may be a scam.
Once you have found the wrapped leg, check it in the following order.
- High price range or low price range?
- Is trading volume increasing?
- Do you have financial statements and materials?
- Did it break through the support/resistance level?
- Will the direction continue on the next leg?
Summary
A wrap is a candlestick pattern that indicates a possible change in the power relationship between buyers and sellers.
By looking at the appearance position and trading volume as a set, rather than making a separate judgment, it becomes easier to use for practical risk management.