Evolution of Charts

What Do Colored Candlesticks Mean? – Technical Chart Analysis


Jul.19.2013

What do colored candlesticks mean on trading charts? We basically use two different colors to distinguish candles that are bearish from candles that are bullish. In other words, we can see whether prices went up or went down between the start and ending of a specific period of time.

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Traditional forex traders (mostly geeky guys) use white candles to show that the market opened at a lower price than the close price in a specific time period (bullish candle.) They use black to show the opposite, that in a specific time-period, the prices generally went down (bearish candle.)

What Do Colored Candlesticks Mean?

But since we are smart, pretty and creative ladies, we can color our candles with any two delightful colors that our hearts desire. On your demo forex trading platform, just look for the candlestick settings and change the colors. If you can’t find it, simply contact your broker’s support team for help. Today, I’m thinking pink for bullish candles and purple for bearish.

What Do Colored Candlesticks Mean - Red & Blue What Do Colored Candlesticks Mean - Red & Blue

Just by taking a glance at the pink candle, we immediately know that in the specific period of time during which this candle was completed, prices generally went up. The opposite is revealed by the purple candle.

One quick point is that forex traders usually use a lighter color for bullish candles and a darker color for bearish. Green and red are the colors most commonly used by stock traders, because in stock trading the positive price movements happen only when the prices go up (bullish), so they use green (the winner’s color) for these candles.

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When the stock markets go down, most people lose money, so stock traders use the red color for bearish candles. But as we said before, in the forex market, bears and bulls can both be winners depending on their position in the market, so we can use whatever colors we feel like! But it is better to be consistent with our personalized candlestick colors so that our eyes get used to them and we don’t get confused.

Here are some other candle color possibilities.

What Do Colored Candlesticks Mean - Green & Purple What Do Colored Candlesticks Mean - Green & Purple

 

The Meaning of Candles Colored in Green and Purple: Green is bullish and purple is bearish.

 

What do colored candlesticks mean? - Pink & purple What do colored candlesticks mean? - Pink & purple

 

The pink candle represents a bullish market sentiment. The purple candle represents a bearish market sentiment.

 

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