White Candlestick

A white candlestick is a point on a candlestick chart representing a day in which the underlying price has moved up.

White candlesticks represent a one day positive increase in a security’s price. The body of the candlestick will typically be displayed in white on a candlestick series chart to represent the price’s positive increase. In some technical charting systems the trader may have the option to choose a specified color or green may also be used to represent price gains. All types of candlesticks will also have two wicks on each end. The wicks are drawn to the day’s high and low price. Thus, candlestick marks show the range of prices that the stock has reported through a single day.

Candlestick charts are convenient for technical traders because they can easily display a full day's price movement. Generally, candlestick charts will be either white/green, red/black or a doji.

Red/black candlesticks are the opposite of white candlesticks. They represent a downward movement for the day. In a red/black candlestick the closing price of a security is reported as lower than the opening price. A doji is a third type of day pattern that is signified by a dash. In a doji, the charted security’s opening price is equal to its closing price.

Technical analysis indicators are formed from the combination of white, red and doji candlesticks. There are many short-term and long-term formations that can be used as indicators for security investment. Below are a few trading patterns commonly identified on a technical analysis chart.

Ascending channel: An ascending channel is formed when a security’s price is rising. This type of channel will predominantly include white candlesticks.

Descending channel: A descending channel is formed when a security’s price is decreasing over time. This type of channel will predominantly include red candlesticks.

Bearish abandoned baby: A bearish abandoned baby pattern is comprised of three consecutive candlesticks centered with a doji. A bearish abandoned baby can signal a breakout to the downside. This pattern occurs when a white candlestick is followed by a doji above the previous day’s close and then a red candlestick with an open below the previous day’s close.

Bullish abandoned baby: A bullish abandoned baby pattern is the opposite of a bearish abandoned baby. This pattern signals a potential reversal to the upside. A bullish abandoned baby pattern will begin with a red candlestick followed by a doji below the previous day’s close and then a white candlestick with an open above the previous day’s doji open/close.