Wick Pressure Signals from RSI Zones and ATR-Filtered Candles
Summary
The indicator looks for possible exhaustion in price movement by identifying repeated long wicks near RSI-defined oversold or overbought zones. For a bullish signal, it checks three candles for lower wicks extending below their bodies, with wick depth exceeding an ATR-based threshold; a qualifying pattern also requires a recent low RSI reading and an up close. The bearish logic mirrors this with upper wicks, a high RSI reading, and a down close.
When a pattern qualifies, the indicator draws a rectangle over the wick area and extends it forward for a configurable length. RSI thresholds, the ATR multiplier, and the box length can be adjusted, affecting which patterns appear and how long their zones remain visible. The author advises combining the indicator with an existing strategy and testing it before use. The document supplies a rule description and implementation, but no backtest, market-specific evidence, or results establishing predictive value; wick patterns may need validation across instruments and timeframes.
Key ideas
- The indicator searches for three-candle wick patterns near RSI-defined extremes.
- An ATR-based threshold filters for sufficiently long wick areas.
- Bullish and bearish conditions use mirrored candle, RSI, and wick checks.
- Qualifying patterns are displayed as forward-extending price zones.
- The indicator is intended for confluence and requires independent testing.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.