Impulse Candle Detection with ATR, Bar Shape, and Volume Filters

Summary

This indicator marks bullish and bearish impulse bars using explicit price and optional volume tests. A candle's absolute body must exceed a multiple of average true range, occupy a minimum share of its full high-low range, and close near the relevant end of that range. An optional confirmation requires tick volume to exceed a multiple of the average over prior bars. Arrows identify qualifying bars, and the indicator exposes separate bullish and bearish signal buffers for automated systems.

The current, still-forming bar can gain or lose its mark; for stable signals, the description advises reading the last closed bar. Default settings are offered for shorter timeframes and volatile instruments, with a suggested adjustment for longer timeframes. These are detection rules, not evidence of a profitable strategy: the indicator does not specify entries, exits, transaction costs, or what to do after an impulse appears.

Key ideas

• A qualifying impulse candle has a body large relative to ATR and to its full bar range.
• The close must lie near the high for bullish bars or near the low for bearish bars.
• Optional tick-volume confirmation compares current volume with the average of prior bars.
• Signals on a forming candle can change before close, so closed-bar readings are more stable.
• The indicator identifies patterns but does not establish whether trading them is profitable.

Tags

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