the hAnDbook of technIcAl AnAlysIs- internal proportions
Relative Position of Real Body and to Real Body Range to Candlestick Range
The position of the opening and closing price with respect to the high and low
prices also plays a part in determining the sentiment, that is, the bullishness or
bearishness of the candlestick pattern. Figure 14.12 displays a few examples of
this interplay.
For example, Example 6 depicts a Harami pattern. By itself, without ref-
erence to the existing trend, it is impossible to determine if it is a bearish or
bullish reversal pattern. Some practitioners would say that it should represent
a bearish reversal pattern, but upon deeper reflection, it can also be fit well
into a bullish reversal pattern. But what is the sentiment if we ignore location,
preceding activity, and all other exogenous factors? In such cases, the only infor-
mation or variable would be the position of the small real‐bodied candlestick, or
spinning top. Hence, in Example 6, the first Harami would be the most bullish
of the three since the spinning top is situated at the top of the first candlestick
range. Using the same logic, Example 2 would be bullish from the start, but the
first candlestick would represent the least bullish of the three. In Example 4, the
first candlestick on the left is the least bullish. With respect to Examples 1 and
2, there should be no difference between them in terms of sentiment. But with
all things being equal, Example 2 would be fractionally more bearish than the
figure 14.12 Internal Proportions.