Price Movement at a Glance
The most important thing to understand about technical analysis is that instead of relying on observations about society or the value that a certain commodity might have to certain people down the road, it uses concrete patterns and trends in the price points of a stock to help the investor more accurately predict where the prices might go in the future. In a world where everyone is aiming to buy low and sell high, tracking price is very important, and the white candlestick is something that you need to be able to understand.
When you’re tracking a certain stock, and there is a day during which the underlying moved up instead of down, this is usually represented as a white candlestick. Just like all points on a candlestick chart, the bottom edge of the body of the white candlestick is used to represent the price at which the stock opened for the day and the top of the body indicates the closing price. Sometime’s you’ll also see lines emerging from the top and bottom tips of the white candlestick, which indicate the day’s highest and lowest prices.
If you are seeing a lot of white candlestick representations on your stock charts, it’s a good idea to get a little excited, because unlike its black or red counterparts, this candlestick indicates that the price of a stock has closed higher than it opened on a particular day. This means that if you bought the stock at the beginning of the day, for a low price, you’re going to be holding a more valuable stock at the end of the day. The shadow, or a thin line attached to the top of the candlestick will help you to see the range of prices that the stock brought in throughout the day.