How Candlestick Colors Represent Price Movement

Summary

The document explains why a candle can be green even when its close is below the previous candle’s close. In a common solid-candle convention, color compares the period’s close with its own open: green indicates the price rose during that interval, while red or orange indicates it fell. That comparison differs from whether the candle closed above or below the prior period’s close.

The answer also describes charts that combine filled and hollow candles. In that convention, the fill can indicate whether the close was above or below the open, while color may indicate the close’s relationship to the previous close. It speculates that the cited exchange chart may instead use hollow green candles for an upward move within the interval and solid red candles for a downward move. The explanation is about chart conventions, and the exact meaning of a particular platform’s display should be checked against that platform’s legend or documentation.

Key ideas

• In a common solid-candle convention, color compares the close with the open of the same period.
• A candle can rise during its period and still close below the previous period’s close.
• Hollow and solid candles may encode movement within the period separately from movement relative to the prior close.
• Chart color conventions vary, so platform-specific legends matter.

Tags

# Confusion about candlesticks colors


# Confusion about candlesticks colors












Why is the second green candle stick green? Given that its closing price is less than the previous candlestick's closing price, shouldn't it be orange?

Source: coninbase 1m chart for ethereum: https://pro.coinbase.com/trade/ETH-GBP

## Answer by D Stanley (score 2, accepted)

https://quant.stackexchange.com/a/60522

When using a solid candlestick chart, a green candlestick means that the opening price for that period was lower than the closing price for that period. In other words, the price went up during that time. So in your example, the price dropped from the close of the prior period, but rose back up slightly by the end of the period.

However, when a chart uses solid and hollow candlesticks, a hollow candlestick represents an upward movement over the period, and a green cnadlestick means that the price closed higher than the previous period's close. So a hollow green represents a period where the price rose but ended below the prior close.

Since all I see on coinbase are hollow green and solid red (or orange) candles, I suspect that they are just using hollow green candles to represent an upward move in that period and solid red to indicate a downward movement in that period, and not comparing to the prior ending price.

Shown in full with attribution under the source's licence. Licence: CC BY-SA 4.0 (Stack Exchange)

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.