Drawbacks of Candlesticks
As with most traditional technical analysis charts and tools, candlesticks only reflect the open, high, low, and close. The sequence of events between the open and close are not represented and key information such as price levels that represent key support and resistance points intra-day are not evident, unless one views an intra-day chart.
In the above example, there are two sequences of events from the open to the close, both represented by a long white candlestick. In the first sequence, the price opened and traded lower for a short period then the buyers surfaced and propelled the price higher all the way to the close until it pulled back slightly. Throughout the day, the bulls were in charge and the sequence is very bullish.
On the other hand, the second sequence opened the same way as the first sequence and started trading higher just after the open. It then consolidated for a long period before rallying to close near the highs. This sequence showed that there was a lot of resistance near the mid-point of the candlestick but this information is not evident from a candlestick formation alone.
Thus, potential support and resistance levels will not be recognized with the candlestick chart alone. That is where a ProSticks bar is unique and can help in identifying these support and resistance levels.