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The trader’s dilemma: Even when you see a strong reversal pattern on a chart, how do you know it’s the real thing? The answer is that any indicator needs to be independently confirmed. This is where East (candlesticks) meets West (traditional technical analysis).

One of the favorite reversal signals used by day traders and swing traders is the volume spike. This applies especially on sessions with an unusually small trading range, the so-called narrow range day (NRD). So an NRD with heavy volume

Candlestick formations consisting of a single-session can be powerful signals of reversal that is just about to occur. The most popular among these are exceptionally long or exceptionally short candlesticks. Long white sessions or dojis (sessions with little or no real body) signal a bullish reversal at the end of a downtrend. And long black sessions or dojis signal a bearish reversal at the end of an uptrend. This “rule” is the basic observation of candlesticks. Any session that is exceptionall