What does a solid black or hollow red candlestick mean?

Traditionally, candlesticks have not been different colors. If the close was less than the open, you would get a filled candlestick and if the close was higher than the open, you would get a hollow (white) candlestick. You can see this by choosing “Black” for both the “Up Color” and “Down Color” settings in our SharpCharts tool.

Coloring candlesticks is actually more complicated than you might think and there are several places where people can get confused. One thing that can confuse people is that there is no such thing as a white candlestick - it is hollow, not white. That means that if you are viewing a candlestick chart with volume bars behind it (the default for SharpCharts), you may see a colored volume bar showing through a hollow candle. If you find that confusing, select “Separate” from the “Volume” dropdown just below the chart.

The next thing to keep in mind is that when the market is open, we add another candlestick on the right side of the chart based on the current intraday quote. Because that candle is still in the process of developing, we draw it on top of a yellow background. The yellow background will disappear when the final closing prices are recorded. (Note: If you subscribe to a real-time data plan, the far right candle will be green instead of yellow.)

Finally, if you use the default colored candlesticks for a SharpChart, here are the rules that we use:

Notice that these rules are subtly different from the rules for determining whether to draw a filled candlestick or a hollow candlestick. Those rules (stated in the first paragraph above) rely on the relationship between the opening price for the current day and the closing price of the current day. These subtle differences can lead to what we call “oxymoronic” candlesticks – candles that are colored bullishly, but filled bearishly (i.e., a filled, black candle) or vice versa (i.e., a hollow red candle).

For example, in the GE chart above, notice that filled, black candlesticks appear at several important peaks on the chart. They happened because GE opened significantly higher than the previous day's close (“gapped up”), fell during the day, yet managed to still close above the previous day's close. Less obviously, on May 23rd, a hollow red candle appears because GE gapped down at the open, rose during the day, but didn't close above the closing price for May 22nd.