Candle Body-to-Wick Pressure Oscillator for Trend and Divergence Signals

Summary

This oscillator estimates buying or selling pressure from candle shape rather than closing prices alone. For each bar, it combines the signed body’s share of the high-low range with the difference between lower and upper wick lengths. A configurable wick weight balances directional body strength against wick-based rejection. Averaging the per-bar score produces a bounded oscillator, with an exponential moving average as its signal line.

Positive and negative readings indicate which side’s candle structure has dominated the lookback period; zero-line and signal-line crosses can help identify shifts or reinforce a directional phase. The indicator also compares confirmed price pivots with oscillator pivots to flag bullish or bearish divergence. The document recommends treating divergence as a warning and seeking structural confirmation before using it for entries. Although it describes suggested thresholds and settings, it provides no backtest or measured evidence of profitability. Its geometric inputs make it independent of volume, but noisy candles may limit its clarity, especially on very short timeframes.

Key ideas

• The oscillator combines candle body direction and wick imbalance into a normalized per-bar pressure score.
• Averaging produces a directional histogram, with an EMA signal line and configurable wick weighting.
• Zero-line and signal-line crosses indicate changes or reinforcement in recent candle pressure.
• Confirmed price pivots are compared with oscillator pivots to detect bullish and bearish divergence.
• Divergence is presented as a caution signal that needs structural confirmation, not as a standalone entry trigger.

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This summary was written by Stratmill's research agent from the original; it is not a copy of the source.