Whiskers Definition
In the world of cryptocurrency and blockchain, whiskers are a component of candlestick charts that are widely used to analyze and predict price trends. The whisker specifically refers to the thin lines that extend from the rectangular “body” of a candlestick symbol on the chart, representing the highest and lowest prices during a certain period.
Whiskers Key Points
- Whiskers form a part of the candlestick on a chart, depicting the full price range for a specified period.
- The upper whisker displays the highest price a currency reached, while the lower whisker shows the lowest price.
- The length of whiskers can indicate the volatility of the market.
What are Whiskers?
Whiskers, also known as shadows or tails, are graphical representations in a candlestick chart that denote the degree of price fluctuations in a specific period. They provide valuable insights into the highs and lows of crypto-assets’ prices for a set timeframe, thus graphically illustrating market volatility.
Why are Whiskers important?
Whiskers on a candlestick chart hold great importance in market technical analysis because they give traders an understanding of market sentiments. By analyzing the length and direction of the whiskers, traders can gauge the extent of buying and selling pressure.
When are Whiskers used?
Whiskers are used anytime someone reads a candlestick chart for trend analysis or to make buying or selling decisions. They can be viewed in different timeframes including hours, days, months or even years, depending on the trader’s strategy and the level of details required.
Where are Whiskers found?
Whiskers are found on all candlestick charts which are used widely in financial analysis platforms, trading software, cryptocurrency exchanges and other similar areas where price analysis is crucial.
Who uses Whiskers?
Every trader, investor, analyst or anyone involved in financial asset prediction and decision making uses whiskers to understand price trends and to make informed decisions. This includes both retail and institutional investors in the cryptocurrency and traditional financial markets.
How do Whiskers work?
The whiskers work by protruding from the candle’s body, indicating the high and low prices for the selected period. The length of the whiskers is indicative of the price swings. A long whisker indicates heightened market volatility with a higher variability in the prices, while short whiskers illustrate a less volatile market with prices remaining relatively stable.
