Candlestick Strength

This indicator quantifies the “energy” of each candlestick by combining its height (high–low span), trading volume, and internal structure (body vs. wick proportions). It provides a numeric measure of how strongly each candle contributes to market momentum, allowing traders to distinguish meaningful price action from indecision or noise.

Concept
Every candlestick represents a short-term contest between buyers and sellers. Large candles with significant volume indicate strong market participation, while small or low-volume candles suggest hesitation or absorption. Candlestick Strength captures this by calculating a normalized measure of each candle’s energy relative to recent activity, making it comparable across different market conditions and timeframes.

The indicator also analyzes the candle’s internal structure:

• The body reflects net directional movement.
  
• The wicks represent back-and-forth price traversal within the candle. Because wick movement does not fully contribute to directional momentum, it is weighted at half the body’s contribution. This ensures the indicator emphasizes sustained directional pressure while still acknowledging rejection or absorption.
  

Interpretation

• High values indicate candles with energy above recent averages — suggesting expanding momentum and strong directional intent.
  
• Average values reflect typical candle activity, representing neutral or steady market behavior.
  
• Low values suggest weak candles — either the market is pausing, consolidating, or momentum is fading.
  

The outputs are displayed as a symmetric histogram: bullish candle energy is shown in green above zero, bearish energy in red below zero, with ±1 reference lines marking the normalized average energy level.

Usage

• Combine with trend analysis, swing highs/lows, or volume-weighted averages to validate breakouts or trend continuation.
  
• Monitor for divergence between price movement and candle energy to identify exhaustion, absorption, or potential reversals.
  
• Filter out false momentum signals caused by narrow-range or low-volume candles.
  
• Adaptable across timeframes: normalized energy allows comparison between small and large timeframe candles.