Paper Umbrella (Karakasa) - Candlestick Bar

April 16, 2008 by admin

Paper Umbrella (Karakasa) dEFINITION

A paper umbrella is a candlestick with a long lower shadow and small real body. The paper umbrella resembles a hanging man or hammer on first glance, but the one difference is the strict requirement that the body be much smaller than the lower shadow. Since the lower shadow is so long, it implies that the bears were unable to keep prices down and it is a early sign that the bearish downturn is over. The color of the real body is irrelevant due to its size. Traders should wait for a break of the high of the paper umbrella to be exceeded prior to taking a long position.

Paper Umbrella Candlestick

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