A high wave is a spinning-top with the range dialled up: shadows several times the body, spanning far more than the recent average bar. It signals that the market has lost its bearings, often after a fast move or ahead of an event.
Traders read a cluster of high wave candles as a sign that positioning is unstable and that a large directional move may follow once the market picks a side.
The practical response is usually to reduce size or stand aside rather than to predict direction. Stops placed inside a high wave range get hit routinely, and widening stops to survive raises dollar risk for the same position. Volatility without direction is the worst combination for most strategies.
Related: spinning-top, long-legged-doji, volatility, atr