Define: Shadow

Business, Legal & Accounting Glossary

Definition: Shadow



What is the dictionary definition of Shadow?

Dictionary Definition


Shadow is the small line found on a candle in a candlestick chart that is used to indicate where the price of a stock has fluctuated relative to the opening and closing prices.


Advertisement



Full Definition of Shadow


In candlestick charting, a shadow is a line on a candle that conveys visual information about the direction and intensity of trading in a particular asset. A shadow indicates the price range over which an asset traded during a specific time period, usually a day. The length of a shadow also reveals approximately when trading occurred and whether it was strong or weak. For example, a short shadow reveals trading was concentrated at the open and close, while a long shadow shows trading extended beyond the open and close. Shadow length and position together reveal even more about the quality of trading action. A long shadow above the body of a candle and a short shadow below it suggest buyers led the trading session until nearly the end, when sellers appeared to drive prices down. The reverse – a short shadow above and long shadow below – suggest sellers led the session until nearly the end, when buyers appeared to drive prices up. A long shadow both above and below a candle suggests buyers and sellers were equally active, and the market was indecisive. A short shadow above and below a candle suggest buyers and sellers were equally inactive, and the market was indecisive.

Interpretation of Shadow

Essentially, the upper and lower shadows illustrate the highest and lowest prices at which a security has traded over a standard time period – day, week, month, etc.


Advertisement




Cite Term


To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
https://payrollheaven.com/define/shadow/
Modern Language Association (MLA):
Shadow. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. April 08, 2020 https://payrollheaven.com/define/shadow/.
Chicago Manual of Style (CMS):
Shadow. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/shadow/ (accessed: April 08, 2020).
American Psychological Association (APA):
Shadow. PayrollHeaven.com. Retrieved April 08, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/shadow/

Definition Sources


Definitions for Shadow are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 22nd March, 2020