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White Candlestick – Definition

White Candlestick Definition

A white candlestick refers to a point displayed on a candlestick chart that exhibits a day when there is a rise in the underlying price.

A Little More on What is a White Candlestick

White candlesticks inform about an increase in the price of a security in one day. In a candlestick chart, the white-colored portion of the candlestick will illustrate the positive increase in the stock price. There can be some technical charting models where the traders can select a distinct color (sometimes green) for stating the rise in price. Every end of the candlestick will consist of two wicks representing the price highs and lows encountered in a day. Therefore, the candlestick gives information about the price range that the stock has experienced in a single day.

Technical traders find candlestick chart a convenient tool for representing the price movement in an entire day. Usually, these charts will be seen in color patterns of white/green, red/black, or a doji.

Red/black candlesticks work in contrast to the white candlesticks. As white candlesticks represent a positive increase in underlying prices for a day, red/black candlesticks represent a declining movement of prices for the day. A doji, being another day pattern, is represented by a dash. Here, the opening price of the stock is equivalent to the closing price.

Technical Analysis Indicators

The indicators of technical analysis are a result of amalgam of white, red and doji candlesticks. While investing in a security, the short-term and long-term formations can be considered as indicators. The trading patterns that can be seen on a technical analysis chart are:

  1. Ascending channel: An ascending channel takes place when the price of security increases. Considering the rise, this channel covers white candlesticks.
  2. Descending channel: A descending channel is formulated when there is a decrease in the security price. This channel is associated with red candlesticks.
  3. Bearish abandoned baby: A bearish abandoned baby pattern consists of three back-to-back candlesticks with a doji being centrally located. It indicates a breakout to the lower side. This specific pattern takes place when a doji follows a white candlestick over the closing price of the last day, and then, a red candlestick that opens below the closing price of the previous day.
  4. Bullish abandoned baby: A bullish abandoned baby pattern is based on totally contrasting grounds with a bearish abandoned baby. This pattern starts with a doji that follows a red candlestick beneath the close price of the previous day, and then a white candlestick that opens above the doji open or close of the previous day.

References for “White Candlestick

https://www.investopedia.com/terms/c/candlestick.asp

www.businessdictionary.com/definition/white-candlestick.html

https://www.candlescanner.com/candlestick-patterns/white-candle/

Academic research for “White Candlestick

Expert system for predicting stock market timing using a candlestick chart, Lee, K. H., & Jo, G. S. (1999). Expert system for predicting stock market timing using a candlestick chart. Expert systems with applications, 16(4), 357-364.

Hybrid approach to the Japanese candlestick method for financial forecasting, Kamo, T., & Dagli, C. (2009). Hybrid approach to the Japanese candlestick method for financial forecasting. Expert Systems with applications, 36(3), 5023-5030.

A comprehensive look at the predictive information in Japanese candlestick, Xie, H., Zhao, X., & Wang, S. (2012). A comprehensive look at the predictive information in Japanese candlestick. Procedia Computer Science, 9, 1219-1227.

Effectiveness of technical analysis using candlestick chart for selection of equity stock in Indian capital market, Varadharajan, P., & Vikkraman, P. (2011). Effectiveness of technical analysis using candlestick chart for selection of equity stock in Indian capital market. Journal of contemporary management research, 5(1), 12.

The predictive power of Japanese candlestick charting in Chinese stock market, Chen, S., Bao, S., & Zhou, Y. (2016). The predictive power of Japanese candlestick charting in Chinese stock market. Physica A: Statistical Mechanics and its Applications, 457, 148-165.

The role of Japanese Candlestick in DVAR model, Xie, H., Fan, K., & Wang, S. (2015). The role of Japanese Candlestick in DVAR model. Journal of Systems Science and Complexity, 28(5), 1177-1193.

THE PREDICTIVE POWER OF CANDLESTICK PRICE PATTERNS IN THE BALTIC STOCK MARKET., Lieksnis, R. (2008). THE PREDICTIVE POWER OF CANDLESTICK PRICE PATTERNS IN THE BALTIC STOCK MARKET. Economics & Business, 17.

Stock price pattern matching system-dynamic programming neural networks approach, Tanigawa, T., & Kamijo, K. (1992, June). Stock price pattern matching system-dynamic programming neural networks approach. In [Proceedings 1992] IJCNN International Joint Conference on Neural Networks (Vol. 2, pp. 465-471). IEEE.

A portfolio optimization model using Genetic Network Programming with control nodes, Chen, Y., Ohkawa, E., Mabu, S., Shimada, K., & Hirasawa, K. (2009). A portfolio optimization model using Genetic Network Programming with control nodes. Expert Systems with Applications, 36(7), 10735-10745.

A portfolio optimization model using Genetic Network Programming with control nodes, Chen, Y., Ohkawa, E., Mabu, S., Shimada, K., & Hirasawa, K. (2009). A portfolio optimization model using Genetic Network Programming with control nodes. Expert Systems with Applications, 36(7), 10735-10745.

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