Wick

In trading charts, a wick — also called a shadow — is the thin line extending above or below the body of a candlestick. It represents the full range of prices reached during a trading period (such as an hour, a day, or a week) beyond the opening and closing prices. The upper wick shows how high the price reached before pulling back, while the lower wick shows how low it fell before recovering. The candlestick body itself, by contrast, represents only the range between the opening and closing price for that period.

Wicks are highly informative for traders because they reveal price rejection — areas where the market pushed to a certain level but was unable to sustain it. A long upper wick on a candlestick indicates that buyers pushed the price up significantly during the period, but sellers stepped in and drove it back down before the close, suggesting selling pressure at higher levels. A long lower wick indicates the opposite: sellers drove the price down aggressively, but buyers absorbed that pressure and pushed the price back up, signaling potential buying support at those lows. These patterns are the basis for several candlestick formations, such as the hammer, shooting star, doji, and pin bar.

For algorithmic traders, wicks carry practical implications for order placement and risk management. A price level that has repeatedly generated long wicks in one direction is likely an area of strong supply or demand, useful for setting stop-loss or take-profit orders. Some trading strategies specifically target wick zones as areas where price may return and reverse. Additionally, extremely long wicks — sometimes called "liquidity wicks" or "stop hunts" — can occur when large players briefly drive price through stop-loss clusters before reversing, a phenomenon that algorithmic strategies can be designed either to avoid or to exploit.