What it means
Long wicks show prices that were visited and rejected within the candle. In SMC, a wick beyond a level that closes back inside is often a liquidity sweep.
In practice
A wick is a record of rejection: price went there and could not stay. Long wicks at a level show that orders were waiting, and several wicks into the same area mark it as defended.
Many traders judge a level by closes and treat wicks through it as tests. A wick that runs past a clear high or low and closes back inside is the classic picture of stops being taken before a reversal.
What to watch for
Wicks differ between brokers and exchanges, especially in forex and crypto, so a stop placed one tick beyond a wick may sit at a different price on another feed. Give stops some room.
Related terms
3 terms- CandlestickA chart bar showing the open, high, low and close of a period, with a coloured body between open and close.
- Liquidity sweepPrice wicking through an obvious high or low to take the stops, then closing back inside and reversing.
- Rejection blockThe long wick at a swing point, from the wick's extreme to the body; a propulsion block is an order block formed on top of an older one.