I recently read YTC Price Action Trader, a great read that explains the way markets move and how traders should look at them. The 6 books are about 600 pages all together, but I recommend it to everyone.
In the book in mentions ongoing active candle analysis, to get pinpoint entries and signs of exits. The reason I'm starting this thread is to create some sort of indicator to simplify that process.
The book identifies three types of candles:
- Bull candles: The candle close is higher than the range of previous candle.
- Range candles: The candle close is within the range of previous candle.
- Bear candles: The candle close is lower than the range of previous candle.
Just to clarify, the range is the distance between the candle's highest and lowest point.
The book also separates 3 types of candles within these categories:
- High close candles: The candle close is in the upper third of it's own range.
- Mid close candles: The candle close is in the middle third of it's own range.
- Low close candles: The candle close is in the lower third of it's own range.
I would like to ask for help in creating an indicator, that differentiates these 9 categories:
- High close bull candle
- Mid close bull candle
- Low close bull candle
- High close range candle
- Mid close range candle
- Low close range candle
- High close bear candle
- Mid close bear candle
- Low close bear candle
The indicator paints candles different colored for each category. Or maybe to simplify, it should draw new candles all together and coloring it's own candles according to the category (see example of similar indicator attached: PVA candle volumes. It draws it's own candles and colors it according to volume of that candle). Obviously colors should be in the settings.
I don't think this should be a major challenge and it would help price action trades greatly in visualizing trades. Unfortunately I can't code in MT4 and I only will have time to start learning during Christmas, so until then can someone please put this indicator together.
Have a nice day,