Color trading is a type of trading strategy that utilizes the color of a stock's chart to predict future price movements. The theory behind color trading is that the color of a stock's chart can indicate whether the stock is in a bullish or bearish trend. This approach is based on technical analysis, which focuses on historical price patterns and market trends to make trading decisions.

In color trading, two main colors are commonly used: green and red. The color green typically represents a bullish trend, indicating that the stock's price is expected to rise. On the other hand, the color red is associated with a bearish trend, suggesting that the stock's price is likely to decline.

By analyzing the color patterns on a stock's chart, traders attempt to identify potential buying or selling opportunities. For example, if a stock's chart consistently shows green candles or bars, it may signal a strong uptrend and could be a favorable time to buy the stock. Conversely, if the chart displays a series of red candles or bars, it may indicate a downtrend and could be a signal to sell or avoid the stock.

It's important to note that color trading is just one of many tools and strategies used in technical analysis. Traders often combine color analysis with other indicators and chart patterns to make more informed trading decisions.

Learn more:

1. What is colour trading? - Quora
2. Color: What it Means, How it Works, Example
3. COLOR TRADING Import Export Trade Data Report, COLOR TRADING Company India