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Hollow candles charts explained

Hollow candles are a popular chart type along standard candles and bars. They’re a lot like standard Japanese candlesticks, only that hollow candles charts use color and fill to indicate both price direction and the relationship between open and close prices.

CONTENTS:

What are hollow candles

Hollow candlesticks consist of a rectangular body that represents open and close prices for a specific time period along with wicks (or shadows) that indicate the highest and lowest prices during that period.

Their bodies can be either filled or hollow. This depends on whether the close price is higher or lower than the open price.

Additionally, the color of a candle is red or green. This is determined by comparing its close price relative to the previous candlestick.

There are the four types of hollow candles:

  • Green hollow candles: Close higher than previous close and close higher than open (bullish momentum)
  • Green filled candles: Close higher than previous close but close lower than open (mixed signal — upward momentum with intraday weakness)
  • Red hollow candles: Close lower than previous close but close higher than open (mixed signal — downward momentum with intraday strength)
  • Red filled candles: Close lower than previous close and close lower than open (bearish momentum)

Hollow candles vs standard candles

While both chart types are widely used by traders, they both have their own benefits and limitations.

Hollow candles

  • Hollow candles help easier grasp trend changes, showing the relationship of close prices between current and previous periods
  • They provide clearer information about accumulation and distribution phases, signalling trend continuation or potential reversal (clusters of hollow candles signal accumulation phases, while filled candles appear during distribution phases)
  • A bit more complex than standard candles

Standard candles

  • Provide clarity due to only-filled-type of candles, however, may mislead you with false reversal signals
  • Some candlestick patterns are easier to spot with this type of chart
  • Both hollow and solid candles give you a clear picture of open, high, low, and close prices

Enabling the chart type

Once you are on Supercharts, open the сhart type menu on the upper toolbar, and select "Hollow candles."

Hollow candles settings

To make the most of the hollow candles chart, customize it according to your preferences and needs.

For that, find the gear "Settings" button on the upper toolbar and go to the "Symbol" tab.

The first section, "Hollow candles," lists settings specific to this chart type:

  1. Body: Change candles' bodies' outlook for enhanced visual appearance
  2. Borders: Change the colors of the candles' edges
  3. Wick: Choose the preferred color of the candles' shadows

Candlestick patterns

To maximize the utility of candlestick charts, you can use Candlestick pattern indicators. To do that, go to the upper toolbar and select "Indicators," choose "Patterns" and scroll down to find "Candlestick patterns indicators."

These automated tools detect specific candlesticks and patterns and provide insights into their potential implications. However, it’s best to always evaluate the broader context and not rely solely on automated indicators to make trading decisions.

Hollow candles in a nutshell

There are many different forms of charts, each enhancing your view on the markets.

Hollow candles are a step forward toward the understanding of distribution and accumulation phases. Their visual appearance may help you avoid potential false signals of other technical analysis tools regarding trend changes or continuation.

In trading, there's nothing completely true and prices on its own. TradingView recommends studying other chart types along with indicators and drawing tools to have a broader understanding of financial markets.

Also read:

Candles charts: what you need to know and how to use them
Learn to use Line charts