Candlestick Range Indicator with a User-Set Volatility Threshold

Summary

This document describes a simple volatility display that measures candlestick size and shows the result as a histogram in a separate chart window. A user-set threshold, expressed in points, determines the color: bars above it appear purple, while bars at or below it appear pink. The example threshold is an input parameter, so traders can adjust the level for their instrument or chart settings.

The note identifies Avery T. Horton, Jr., known as TRO, as the author and says the indicator was first implemented in MQL4 and published in 2008. It provides no performance tests, trading rules, or evidence that a particular threshold predicts future price movement. The display can help identify relatively large candles, but interpretation depends on the instrument, timeframe, and chosen threshold; the document does not specify how candle size is calculated or how to use the signal in a strategy.

Key ideas

• The indicator displays candlestick sizes as a histogram in a separate chart window.
• A configurable point threshold sets which bars receive each of the two colors.
• The document presents the tool as a volatility meter rather than a complete trading strategy.
• No backtest or evidence of predictive performance is provided.

Tags

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