REAL BODY AND SHADOWS

While an individual candle usually should not be used alone to place a
trade, the size and color of its real body and the length of its shadows
can provide a wealth of information. Specifically, looking at a line's real
body and shadows gives a sense of the supply and demand situation.
This section will discuss this basic idea, and explain how to use real
bodies and shadows to get clues about the market's underlying strength
or weakness. By using the candle lines discussed below, you may be able
to get an early and tentative indication of market direction.

THE REAL BODY

In ]apanese charts, even an individual candle line has meaning, and one
of the first clues about the vitality of the market is to look at the size and
color of the real body. To the |apanese, the real body is the essence of
the price movement. This is a critical and powerful aspect of candle charts;
through the height and color of the real body, candle charts clearly and
quickly display the relative posture of the bulls and the bears.

This section will be segmented according to the decreasing size of the
real bodies. The first part of this section will consequently focus on long
white and then long black real bodies. After these, attention is turned to
candles with small real bodies called spinning tops. These diminutive
real bodies display a market where the bulls and bears are in a tug of
war.

This section will conclude with candles that have no real bodies. These
candles have the same (or nearly the same) opening and closing. Such
candles, called doji (pronounced d6-gee), reflect a market in a state of
transition. Doji, as you will see later, can be an important market signal.

Long White Real Bodies

A long white real body is defined as a session that opens at or near the
low of session, and then closes at or near the session's high. The close
should be much higher than the open. For example, if a stock opens at
$40 and closes at $4ff/v it would not be a long white candle since the
opening and closing range were relatively close. For a long white candle
to have meaning, some Japanese candlestick traders believe that the real
body should be at least three times as long as the previous day's real
body.