Comparing Candlestick Shadows and Bodies with Their Daily Average
Summary
The CandleSizes indicator plots the size of a selected candlestick component as a histogram and shows its daily average as a line. Users can choose upper shadows, lower shadows, or candle bodies. Bars that exceed the average are highlighted, while the neutral color marks values at or below it.
The document suggests examining upper shadows after an upward move and lower shadows after a downward move as possible clues to reversal, and using size readings to help confirm important price levels or develop other candle-based indicators. These are suggested applications rather than tested trading rules: no definitions for measuring a reversal, thresholds beyond the daily average, or performance results are supplied. The described indicator is available on timeframes up to H2, which limits its stated operating range. Candle component size alone does not establish direction or a reliable entry signal, so the interpretation depends on context and would need evaluation.
Key ideas
- The indicator plots the size of candle bodies or selected upper or lower shadows.
- A line gives the daily average, and bars above it receive a distinct color.
- The document suggests studying upper shadows after rises and lower shadows after declines.
- Candle size may be used as confirmation for price levels or as input to other indicators.
- The stated timeframe limit is H2, and no performance evidence is provided.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.