Using High and Low EMAs to Color Price Candles

Summary

This chart indicator classifies each candle by comparing its close with two exponential moving averages calculated separately from highs and lows. A close above the high-based average is colored green, a close below the low-based average is colored red, and a close between the two averages is colored blue. The paired averages form a price channel, while the color communicates the close’s position relative to that channel.

The document provides indicator code for drawing the candles and specifies a period of 34 for both averages. It does not show chart examples, define entry or exit rules, or report performance. The colors therefore serve as a visual classification rather than a complete trading strategy; they do not establish future direction, quantify risk, or account for how signals behave across instruments and timeframes.

Key ideas

• The indicator uses separate exponential averages of highs and lows to define a channel.
• Closes above the high-based average receive one color, while closes below the low-based average receive another.
• Closes between the averages receive a third color.
• The candle colors describe price position and do not constitute tested trading rules.

Tags

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