Wick Refinement: Finding the True Origin of Every Move

You've identified the break. You know which candle caused it. But when you mark the entire candle as your zone, the entry feels wide and the stop loss feels far. There's a tighter entry hiding inside that candle — and it's usually in the wick.

The principle is simple: the real institutional interest that powered a move often hides in the wick of the originating candle, not in its body.

Why the Wick Matters

When a candle has a significant wick, that wick tells a story. It means price traded at those levels, encountered interest, and then moved away. The wick represents the zone where the decision was actually made.

Consider a bullish move: price drops, creates a long lower wick, then closes well above the open. The body tells you price closed higher. But the wick tells you where the buying actually started — where institutional orders were sitting that absorbed the selling pressure and reversed the direction.

If you place your entry at the top of the candle body, you might get filled but you're entering far from where the actual decision was made. If you refine to the wick — the zone where buying actually kicked in — you get a tighter entry, a smaller stop, and significantly better risk-to-reward.

The "Shit in Wicks" Principle

Here's the blunt version: the real stuff hides in wicks.

When you're looking for what caused a break — what demand zone originated the move that broke supply, or what supply zone originated the move that broke demand — the answer is frequently a candle whose body doesn't look special, but whose wick extends into the zone that matters.

Example: Finding the True Demand

Price is pushing up and breaks through a supply zone. You ask: "What caused this break?" You look left at the candles before the break-through move.

There's a candle with a body that sits above the area, but its wick dips down into an earlier structure level. That wick — not the body — is where the buying interest entered. The demand that caused the break lives in the wick.

Mark that wick zone as your demand. Your stop goes just below the wick. Your entry sits at the top of the wick. This gives you a much tighter trade than using the full candle body.

Example: Finding the True Supply

Price is dropping and breaks through a demand zone. What caused it? Look at the candle before the break. It has a small body but a significant upper wick that reaches into the previous supply area.

That wick is where selling interest entered the market. The supply that caused the break is in the wick. Refine your zone to the wick area for a tighter short entry.

When to Refine and When Not To

Not every wick deserves refinement. Here's how to decide:

Refine When:

• The wick is significant — it extends well beyond the body, covering a meaningful price range
• The wick reaches into structure — it touches a previous supply or demand zone, a level of liquidity, or a key structural point
• You need tighter risk — the full candle zone gives you a wide stop that makes the R:R unattractive

Don't Refine When:

• The wick is tiny — a 1-2 pip wick on a large candle doesn't give you enough room for entry + spread
• The move originated from the body — some breaks come from large-bodied candles with small wicks, where the institutional interest was clearly in the body
• You're already tight enough — if the full candle zone gives good R:R, refining to the wick adds risk of not getting filled for minimal benefit

The Order Block and Wick Connection

An order block is the last opposing candle before an impulsive move. It's the sell candle before a big buy move, or the buy candle before a big sell move.

Often, the order block candle has a wick that extends beyond its body. This wick is where the "final absorption" happened — the last bit of opposing pressure that was absorbed before the move started.

The refined entry: instead of placing your limit at the body of the order block, place it at the wick. This is where the actual absorption happened and where resting orders are most likely to still exist.

The Inside Bar Exception

Inside bars (where the entire candle fits within the previous candle's range) create a special situation. The inside bar represents compression — the market is building energy before a move.

When an inside bar appears at a key level, the origin of the subsequent move is often the inside bar itself, not its wick. In this case, the entire inside bar range is your zone. Don't try to refine further — the compression is the zone.

Practical Application

Step 1: Identify the Break

A supply or demand zone has been broken. This is your signal.

Step 2: Find the Originating Candle

Look left. Which candle (or small group of candles) originated the move that caused the break? This is typically the last opposing candle before the impulse.

Step 3: Check the Wick

Does the originating candle have a significant wick? Does that wick reach into any previous structure, liquidity level, or zone?

Step 4: Decide on Refinement

If the wick is significant and touches structure, refine your zone to the wick area. If the wick is small or the body is where the action was, use the full candle zone.

Step 5: Set Your Entry

Place your limit order within the refined zone. Your stop goes just beyond the wick (for a refined entry) or just beyond the full candle (for an unrefined entry). One and a half pips of buffer is typically enough to account for spread and slippage.

Stop Loss Placement with Wick Refinement

When you refine to the wick, your stop loss gets tighter by definition. But it should still cover the entire refined zone:

• Entry: At the edge of the wick zone (top of wick for demand, bottom of wick for supply)
• Stop: Just beyond the wick extreme, plus spread buffer
• The logic: If price moves through the wick zone entirely, the institutional interest isn't there anymore. Your thesis is invalidated.

The beauty of wick refinement: because your stop is tighter, the same target gives you significantly better R:R. A trade that was 1:3 with a full candle zone might become 1:6 with a wick-refined entry.

Common Mistakes

Refining Too Aggressively

Trying to refine to the pip of the wick. The wick represents a zone, not a precise level. Give yourself room — refine to the wick area, not the exact wick low or high.

Ignoring the Body When It Matters

Sometimes the body IS the zone. Large-bodied engulfing candles with tiny wicks tell you the institutional interest was in the body's range. Trying to refine to a 2-pip wick on a 20-pip body makes no sense.

Not Accounting for Spread

On wick-refined entries, the zone is already tight. If you don't account for spread (especially during volatile sessions or on wider-spread pairs), you'll get filled at a worse price than intended, and your effective stop might be too tight.

Refining on the Wrong Timeframe

If you're trading from a 15-minute zone, refining the wick on the 15-minute chart is appropriate. Don't then drop to the 1-minute and try to refine the 15-minute wick further — that's over-optimization that adds complexity without reliably improving results.

Key Takeaway

The real origin of a move hides in the wick of the originating candle. When you find a break of supply or demand and trace back to what caused it, refine your entry to the wick zone for tighter stops and better risk-to-reward. The wick is where the institutional decision was made — that's where you want your entry. Not every wick deserves refinement (small wicks, body-dominant candles), but when the wick is significant and reaches into structure, it's the single best way to improve your entry precision without adding complexity to your analysis.