What Is a Momentum Candle

Two of five days

A momentum candle is a day the market went one way and kept going. Of five days of the euro against the dollar at the end of July 2025, two are momentum candles: 30 July fell 142 pips from open to close and finished 2 pips off its low, and 1 August rose 173 pips and finished 10 pips off its high, a pip being the fourth decimal place, the smallest step most people count in. The other three days have bodies of 41, 11 and 21 pips. Colour does not matter; a momentum candle can be red or green. What matters is the long body, the short thin lines at either end, and a close near the far end.

A locomotive at speed

The picture is a locomotive at speed. It goes one way, it does not stop, and it does not come back. That day on a chart is a candle whose body — the distance from the open to the close — is long, and whose wicks — the thin lines beyond the body — are short, because the price hardly went the other way before or after. The colour says which way the train went. The length of the body says how far it got.

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