Hollow candle vs normal candle

Hollow candles and normal (filled) candles are two different representations of price action in financial markets, each with its own advantages and uses. Here's a comparison of the two:

1. **Construction and Meaning**:
- **Normal (Filled) Candles**: These candles have a solid body that represents the trading range between the open and close prices. A filled candle indicates that the closing price is lower than the opening price, suggesting bearish sentiment.
- **Hollow Candles**: Hollow candles, on the other hand, have a body that is hollow or open at the bottom, indicating that the closing price is higher than the opening price. This suggests bullish sentiment.
2. **Color Representation**:
- **Normal (Filled) Candles**: Typically colored red or black, these candles indicate a close that is lower than the open, which can signal bearish momentum or a potential reversal point if the next candle is bullish.
- **Hollow Candles**: Colored green or white, hollow candles indicate a close that is higher than the open, suggesting bullish momentum or a strong buying pressure.
3. **Trend Indication**:
- **Normal (Filled) Candles**: These can indicate potential reversal points, especially if the next candle is in the opposite direction. A series of long filled candles can signal strong selling pressure.
- **Hollow Candles**: A series of long hollow candles indicates strong buying pressure and can be a sign of a bullish trend.
4. **Momentum and Reversal Signals**:
- Both hollow and filled candles can be used to identify momentum and potential reversal signals. For example, a green or white hollow candle followed by a red or black filled candle can indicate a shift in momentum or a potential reversal point.
5. **Advantages and Limitations**:
- **Normal (Filled) Candles**: These are widely recognized and easier to interpret, especially for traders new to technical analysis. They provide a clear visual representation of price movements.
- **Hollow Candles**: While they offer a clearer indication of market momentum, they are not as widely used as traditional Japanese candlesticks, which may limit access to resources and interpretations.

In summary, hollow candles and normal candles are both valuable tools for analyzing price movements, but they differ in their construction, color representation, and the information they provide about market sentiment and potential reversal points. Traders should consider their specific needs and trading strategies when choosing which type of candle to use.