Typically candlesticks can have various colors in charts. Usually, a bullish candle has green color and bearish red color. Each trading platform has a different way of how presents candlesticks.
A hollow candle plot on the chart the difference between the close of the current bar and the open price of the current bar and tell traders that security moved higher after it’s open. A candlestick with a hollow body where the close price is above the open price level is called a bullish candlestick.
Metatrader hollow candle chart
Below we can see a video about a hollow candle:
Hollow candle and other trading platforms
In some platforms, this is denoted by choosing the black color for both the down and the up color. In reality, the coloring of candlesticks is far more complicated than what most people realize. Most people do not realize that there is no white candlestick in the candle chart, when the candlestick is hollow, it appears to be white in color.
A hollow red candle represents a bullish candle where the prior close was greater than the current close and the current close is above the current open. A hollow black candle represents a bullish candle close is above the prior close and current open.
In sharp charts, the default option is that the candlestick chart is displayed along with volume bars behind the chart. In some cases, the volume is colored and may be visible behind the hollow candle. So if the chart user finds this confusing, there is an option provided for separating the candlestick and other charts. There is an option to separate, in the volume drop-down menu, below the chart.
Yellow candlestick
Traders should be aware that when the market is still open, in the charts which are produced, an additional candlestick is added to the chart on the right-hand side. The candlestick parameters depend on the current quote for intraday trading. Since the parameters for the candle are changing, it is drawn using a yellow background to differentiate it from other candlesticks. This yellow background will be removed when the final prices at the closing of the trading session are recorded. Traders who are using a plan which shows the data in real-time should note that the background used for the candle at the far right, is not yellow, it will be green in color
Red, a black candlestick
Traders should be aware that Sharpchart has rules which define the default colors for the candlesticks in the chart. If the closing value for the previous day was equal to or less than the closing market value for today, the candlestick for today (current day) should be drawn in black color. However, if the closing value for a day earlier, is more than today’s closing value, the candlestick for the current day will be drawn using red color. Traders should be aware that these rules are slightly different when compared to the rules which are used for drawing a candlestick which is hollow or filled. These rules which are clearly specified in the first paragraph of the article, use the relationship between the opening price and the closing price for the same day.
This difference is very subtle. The black candlestick is filled, while the red candlestick is hollow. In the trading charts of some major companies, filled candlesticks which are black in color, are shown at the major peaks in the chart. This is because in some cases, the share prices of the company have opened at values which are significantly higher than the close for the previous day in a term called gapped up. The prices of these shares have declined from the opening, yet the closing is higher than the closing of the previous day. In some cases, a hollow red candle may appear, because they share prices gapped down, rose in value, yet did not rise above the previous day’s closing prices.
Trader at Leanta Capital
Igor has been a trader since 2007. Currently, Igor works for several prop trading companies.
He is an expert in financial niche, long-term trading, and weekly technical levels.
The primary field of Igor's research is the application of machine learning in algorithmic trading.
Education: Computer Engineering and Ph.D. in machine learning.
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FAQs
Hollow candlesticks, where the close is greater than the open, indicate buying pressure. Filled candlesticks, where the close is less than the open, indicate selling pressure.
How do you explain a hollow candlestick? ›
The fill of the candlestick's body is determined by comparing the closing price of the current candlestick with the opening price of the current candlestick. Hollow = The current candlestick's close is greater than the current candlestick's open.
What does an unfilled candlestick mean? ›
Understanding Candlesticks
An unfilled candle, shown on the left, is created when the opening price is lower than the security's closing price. Each bar can represent a minute, day, week, or even month, but the chosen time frame does not influence the color of the candle.
How to study a candle chart? ›
A short upper wick on a red candle suggests the stock opened near its daily high. Conversely, a short upper wick on a green candle suggests the stock closed near its daily high. In summary, a candlestick graph presents the relationship between a stock's high, low, opening, and closing prices.
What is the difference between heikin ashi and hollow candles? ›
A Heikin-Ashi candlestick is hollow when the HA-Close is above the HA-Open; conversely, Heikin-Ashi candlesticks are filled when the HA-Close is below the HA-Open. This is similar to normal candlesticks, which are filled when the close is below the open and hollow when the close is above the open.
What is a simple explanation of a candlestick chart? ›
A candlestick is a type of price chart used in technical analysis that displays the high, low, open, and closing prices of a security for a specific period.
What's the difference between solid and hollow candlesticks? ›
A candlestick with a hollow body is called a bullish candlestick. The close is higher than the open. A candlestick with a solid body is called a bearish candlestick. The close is lower than the open.
What is the difference between filled and unfilled candlesticks? ›
First, a close lower than the prior close gets a red candlestick and a higher close gets a black candlestick. Second, a candlestick is hollow when the close is above the open and filled when the close is below the open.
What is the most powerful candlestick pattern? ›
8 Strongest Candlestick Patterns
- Bullish and Bearish Reversal Patterns, where an up-trend or down-trend is expected to reverse direction;
- Bullish and Bearish Continuation Patterns, where the trend is likely to continue in its original direction; and.
- Consolidations, where future trend direction remains uncertain.
This triple candlestick pattern indicates that the downtrend is possibly over and that a new uptrend has started. For a valid three inside up candlestick formation, look for these properties: The first candle should be found at the bottom of a downtrend and is characterized by a long bearish candlestick.
From a psychological standpoint, candlestick patterns reflect the collective emotions and actions of market participants. Each candlestick represents a specific period of time, such as a day or an hour, and displays the price action during that period.
What is the psychology of candlesticks? ›
Each candlestick represents the price action for a specific time period, such as one minute, one hour, one day, etc. The candlestick has four main components: Open: The opening price of the asset for the given time period. Close: The closing price of the asset for the given time period.
How do you memorize candlesticks? ›
You can use this to remember candlestick patterns by thinking of the patterns that are in the chart: open candle means there is a reversal; upper candle means the pattern is bullish; lower candle means bearish; inside candle means a bullish trend may continue, and outside candle means it's probably time to hedge.
What is the Heikin Ashi 5 rule? ›
Rules in Heikin-Ashi
White body sequence = uptrend. Black body sequence = downtrend. Strong bullish trend = Large white bodies and no lower shadows. Strong bearish trend = Large black bodies with no upper shadows. When the trend weakens, small bodies appear with possible upper and / or lower shadows.
Do professional traders use Heikin Ashi? ›
The Heikin-Ashi technique is used by technical traders to identify a given trend more easily. Hollow white (or green) candles with no lower shadows are used to signal a strong uptrend, while filled black (or red) candles with no upper shadow are used to identify a strong downtrend.
Why not to use heikin ashi? ›
Heikin Ashi charts obscure actual price information.
The closing price is considered important for many traders, but the actual closing price is NOT displayed on a Heikin Ashi candlestick. You only see the averaged closing price. Make sure you're aware of the actual closing price, and not just the averaged value.
Why are some stock candles hollow? ›
If the close was less than the open, you would get a filled candlestick; if the close was higher than the open, you would get a hollow candlestick.
Why are candle flames hollow? ›
Observe that the flame looks hollow in the center. This is because the center is fuel rich, and there is no oxygen to burn. Around the edges of the flame where it looks like a halo, the screen absorbed the heat and broke down into gaseous fuel.
What is a candlestick without shadow called? ›
Marubozu means “close-cropped” Typically, the marubozu is a long candle that implies the day's trading range has been large. A marubozu candle lacks either an upper or lower shadow.
