Generating Synthetic Candles to Test Trading Indicators
Summary
This Pine Script tool creates artificial open, high, low, and close series for evaluating indicators in a controlled environment. Its recursive random process produces close values, while separate smoothed random components shape the highs and lows; adjustable inputs affect the starting value, randomness, wick size, open-to-close variation, and price scaling. The script can also derive common candle averages and display the generated candles for visual inspection.
The intended use is development and troubleshooting: researchers can examine indicator behavior across changing synthetic price patterns and inspect initialization, including recursive filters that may behave unexpectedly at the start of a series. The author explicitly cautions that the generated values do not represent a ticker and should not be used for trading. The document offers no statistical validation that the synthetic series capture real market behavior, so results on these candles cannot establish live-market performance.
Key ideas
- The generator creates synthetic OHLC candles from randomized, recursively smoothed values.
- Inputs let users alter close randomness, wick variability, open-close variation, and price scaling.
- Developers can substitute the generated series into indicators to inspect behavior and initialization.
- The artificial candles do not represent market prices and are unsuitable for trading decisions.
- Testing on synthetic data alone does not establish performance on real market data.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.