Candle Strength Indicator: OHLC Position and Candle Direction

Summary

This indicator expresses a candle’s position within its high-low range as a centered value. It compares the open with the low, scales that distance by the full range, and shifts the result so the output is centered around zero. The display separates bullish candles into a green histogram and bearish candles into a red histogram, with reference lines at zero and the range extremes.

The document gives the calculation and a ProRealTime implementation adapted from an MT4 version. It is a descriptive candle measure rather than a complete trading strategy: no entry, exit, or position-sizing rules are specified, and no backtest or performance evidence is presented. Because the calculation divides by the candle’s high-low range, a zero-range candle would require handling to avoid an undefined value. The indicator’s output also depends on candle direction and the open’s location, so it should not be read as an independent measure of future price movement.

Key ideas

• The indicator scales the open’s location between the candle low and high into a centered measure.
• Bullish and bearish candles are displayed as separate colored histograms.
• Reference levels mark zero and the two ends of the indicator’s scale.
• The source provides an implementation but no trading rules or performance evaluation.
• A candle with no high-low range requires special handling for the division.

Tags

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