Synthetic Candles for Highlighting Hammer Reversal Patterns

Summary

This indicator creates synthetic Japanese candlesticks over a configurable period by averaging the price series used in its calculations. It visually emphasizes candle shapes classified as hammers or inverted hammers, using separate colors for the two types. The body’s position in the upper or lower half of the candle is part of the classification described in the document.

Highlight intensity also depends on the relation between the candle’s tail and closing price: candles with these features on different sides receive a brighter color than those on the same side. The description explains the indicator’s visual rules but supplies no performance tests, entry or exit rules, or evidence that these patterns predict returns. It also notes a dependency on a smoothing library, so the text alone is not a complete account of installation or calculation details. Treat the markings as a way to inspect candlestick patterns, not as demonstrated trading signals.

Key ideas

• The indicator builds synthetic candlesticks by averaging price series over a configurable period.
• It highlights hammer and inverted-hammer shapes with different colors.
• The candle body’s position and the relation between the tail and close determine the displayed emphasis.
• The description provides no backtest or evidence of predictive performance.

Tags

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