The Big Black Candlestick is a confirmation pattern for downtrends and is noted for having a high reliability. Itis characterized by open near the maximum and close near the minimum, with a much larger real body than other Black Candlesticks that usually occur in the price charts. Because of this, to identify a candle to this type it must have a real body at least three times larger than the common black candles.
Candlestick Pattern Interpretation
The Big Black Candlestick indicates that the bearish forces are absolutely dominating the market trend (a downward trend) and therefore the upward forces have been completely overcome. The Big Black Candlestick is bearish fundamentally and although it does not indicate a possible change in the price trend (something that traders always try to find), it give information that helps us make decisions about the market because it indicates that there is a high probability that the price will continue in the same bearish direction.
-This candle allows the confirmation of resistance, either pricing, windows, previous figures or patterns, or trend lines. If the trader encounter one of these possibilities and the market reacts by producing a Big Black Candlestick, this is a clear indication that the resistance is reliable and that it is the best time to open short positions or to close long positions.
-But if the market manages to break an important support such as a relevant price level, exceeds (in a downward motion) a bearish pattern or figure or break an uptrend during a Big Black Candlestick, this indicates that the the downward movement has a strong reliability so it is time to close all buy positions and open new sell positions.
-The Big Black Candlestick indicates a strong domain of the bearish forces, so that its real body will take the role of acting as resistance. Almost always this resistance can be located in the middle of the real body and when a rebound in the price (bullish) after a Big Black Candle fail to cross the midpoint of the black body it would be another important signal to close all bullish positions if had not been done before. However, if the price rises and crosses that level (midpoint of the real body) the rest of the real body will continue to act as resistance and will retain the upward forces
Big Black Candle Example
More candlestick patterns for Forex and other markets in: List of Candlestick Patterns
