Granthara04.02.03Indecision candles

Every price in Part 04 comes from an unnamed vegetable market and is a teaching example. Nothing here is a quote, a recommendation, or a record of any listed company.

04.02.03 · Indecision candles

PreviouslyA rejection candle records a price that was reached and not held.

Two rupees eighty of travel. Seventy paise of progress.

The mandi argued all morning. Rain was coming, or it was not; a big order was placed and then halved. Bids went to ₹31.60 and down to ₹28.80 and by the bell Lakshmi wrote ₹30.70 — seventy paise from where the day began, after nearly three rupees of shouting.

Distance travelled and progress made are two different measurements. Only one of them is the body.

Updated

25%
of the day's range that the body takes up
Part 04 · Candle Categories by Meaning
  1. 04.02.01 Momentum / conviction candles
  2. 04.02.02 Rejection candles
  3. 04.02.03 Indecision candles
  4. 04.02.04 Absorption candles (high volume, small range)
  5. 04.02.05 Exhaustion candles
  6. 04.02.06 Belt hold, marubozu variants, and the four-price doji
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Learn

Two numbers that are not the same number

Every board carries both. Distance travelled is highest minus lowest — everything the price did. Net progress is last bid minus first bid — where it finished relative to where it started.

Most days those two are roughly related. On some days they come apart completely, and today is one: ₹2.80 of travel and ₹0.70 of progress.

An indecision candle — a small-body candle, or a spinning top when there are shadows on both sides — is a board where the second number is small relative to the first. It does not mean a quiet day. It means a day that went out and came back.

See it

Hold the ends still and stretch the day

The first and last bid never move. Drag to change how far the day travelled around them, and watch what the body does.

The body is the same seventy paise in every position. What changes is the share of the day it accounts for.

Learn

Why the body is a ratio, not a size

That is the whole mechanism. The body never changed — it was seventy paise at every point on the slider — but the name did, because what earns the name is the body as a share of the range.

So a small body is not a small movement. It is a movement that is small compared with the day it happened in. A seventy-paise body inside a seventy-paise range is a completely different board, and gets no such name.

Granthara's own rules engine draws the line at 30% of the range for a small body, with shadows of at least 20% on each side, and calls the result a spinning top. That number is a convention. Other sources choose differently, and none of them discovered it.

A small body records little net progress, however large the range. It does not record a quiet session, and it never records what happens next.

Learn

The stricter cases, and their names

Push the body smaller and the names get stronger. With a body of about a tenth of the range and long shadows both ways — Lakshmi's ₹30 · ₹32 · ₹28 · ₹30.40 board — it is called a high wave: the session swung hard in both directions and settled nowhere.

Push it further, until the first and last bid are effectively the same price, and it becomes a doji. That family is 04.03.01, already written, and it is the strict case of this shape rather than a different idea.

The ordering is worth keeping straight, because it is one measurement narrowing: small body, then very small body with long shadows, then a body of effectively nothing.

Two of Lakshmi's boards, side by side
₹30 · ₹31.60 · ₹28.80 · ₹30.70
body 25.0% — a spinning top
₹30 · ₹32 · ₹28 · ₹30.40
body 10.0% — a high wave
Distance travelled, first board
₹2.80
Net progress, first board
₹0.70
What either says about tomorrow
nothing
4×more travel than progress, on the first board
30%the convention for a small body
Try it

Two boards have a body of exactly ₹0.70. The first has a range of ₹2.80, the second a range of ₹0.90. Which is an indecision candle?

Try it

Which of these is true of a spinning top?

The day finished close to where it started
The day was quiet
Both shadows are long relative to the body
Buyers and sellers are evenly matched
It is a weaker form of a doji
The next session will break one way or the other

What Rahul actually wants to knowHe asks whether an undecided day means the market is about to make its mind up. Lakshmi's answer is the one she always gives: "My board tells you what happened today. It has never once told me tomorrow's price."

Three names, three regions of one measurement. Now a board that looks exactly like today's — and was the busiest session of the month.

Remember

A small body records little net progress however far the day travelled, because the name is the body measured as a share of the range — and tightening that one ratio gives you a spinning top, then a high wave, then a doji.

Everything this chapter has told you, in order

  1. 04.02.01A momentum candle is a large range whose close finished near one extreme: a day that went one way and stayed there.
  2. 04.02.02Four famous reversal patterns are one shape in two orientations; only what precedes them supplies the name.
  3. 04.02.03A small body records little net progress however large the range, because the name is a ratio and not a size.
Next
04.02.04 — Absorption candles (high volume, small range)

Next: a board that looks like this one, on the busiest day of the month.