Measuring Buyer and Seller Pressure with Candle-Based Forces

Summary

This indicator concept estimates seller pressure as the distance from a bar’s high to its close, and buyer pressure from its low to its close, with an option to take the absolute value of the buyer measure. It smooths these series using a configurable moving average and also calculates the difference between the buyer and seller readings with its own average. The suggested chart layouts display the raw flows, smoothed lines, and their crossings separately.

The method is a price-range proxy for buying and selling pressure, not a direct measure of orders or executed volume. Its interpretation depends on the chosen averaging period and type, and changing the absolute-value setting alters the buyer series. The document provides indicator code and visualization suggestions but no validation, trading rules, or performance evidence. Candle-based pressure readings should therefore be treated as exploratory signals and tested against the intended instrument and timeframe.

Key ideas

• Seller pressure is represented by the high-to-close distance, while buyer pressure uses the low-to-close distance.
• The buyer calculation can optionally use an absolute value.
• The indicator smooths buyer and seller readings and their difference with configurable averages.
• Separate chart views can show flows and crossings for the raw and smoothed series.
• These candle-based values proxy pressure and are not direct order-flow measurements.

Tags

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