Have you ever heard that each candle represents a battle between bulls (buyer) and bears (seller)? If you know the answer, apparently you understand what the price action means. What if I ask you, how much was bloody in each battle between bulls and bears?!. This indicator may give a clear picture of how to identify the candle’s strength by implementing the Standard Deviation on volume and reshape the candle. The Muqwishi Volumetric Candles indicator works to weigh each candle instantaneously and updates its color level from lightness to darkness based on the rate of the volumetric standard deviation.
Here’s how the idea started with the conceptual design, then improved till achieved to the implemented design of a structured candle.
The conceptual design mentioned for reviewing how the idea started. However, I want you to understand the “implemented design” in which the indicator has been built to address it. As I stated structurally for the implemented design section, wick and border are identified by the user through “Chart Properties” unlike core and body is measured by the indicator. The candle’s body is ”Dynamic” that colored based on the amount of volume standard deviation in which the low volume standard deviation is a lighter candle’s color and the high volume standard deviation is a darker candle’s color. The core is “Static” color represents zero volume standard deviation which the volume at the average level. In the case where the core is darker than the body means the volume standard deviation is lower than the average volume level, and when the core is lighter than the body mean the volume standard deviation is higher than the average volume level, and when the core’s color has the same body’s color means the volume is in the average level. The image is the best guide to understand the idea.
Rarely seeing a volume standard deviation below -2σ, even though the volume is apparently dead. However, it’s possible to see more than 3.9σ, and mostly it has the same effect as 3.9σ. Personally, any candle above 1.5σ is taking my attention, and more than 2σ I look around seeking for reasons to not take a trade.
§§ Note, if you have misunderstood the standard deviation concept, there are many great sources to understand it such as Wikipedia, YouTube,... etc. In a basic example, How much is your height relative to the height of average people in your city!!?. Similarly, how much is the amount of volume relative to the average volume of a number series of previous bars?!.
Indicator Overview Before I get into this section, this is NOT meant to be an educational or recommendation. Just showing you how I use this indicator based on an experience. The chart above has been remarked as an example of how I apply it. Again, it’s a personal preference, and it doesn’t mean this’s an efficient way.
➤ Indicator’s inputs. ■ Length: Number of previous bars covered in the calculation. Prefer between 14-20.
■ Long Candle Color: Choose a color for bullish candles. ■ Short Candle Color: Choose a color for bearish candles. ■ Color Mode: Kinda color style. ● Lightness: From lightness to darkness colored as low volume SD to high volume SD. ● Saturation: From narrow range to wide range colored as low volume SD to high volume SD. ■ Reverse Mode: Yes → Darkness to Lightness colored as low SD to high SD. ■ Show Core: No → Hide cores.
Summarize ■ Users should have a fundamental knowledge of Standard Deviation. ■ The candle’s body is dynamic colored. Got light as low volume standard deviation, and Dark as high volume standard deviation occurred. ■ The Candle’s core is static colored. Represents the average volume which Standard Deviation equals zero. ■ This’s not a trading signal. It works to visualize the level of transactions made per candle.
Final Comments ■ My goal was to achieve the conceptual design, but there’re many obstacles that go beyond the coding ability. ■ Let me know if you have any questions, comments, and any improvements to the project. ■ I hope every time you found this indicator useful and scaled up your trading skills, please present support through PayPal that linked in the signature box below. That will help to get me excited and post many ideas. ■ Trade Safe. ✌
Catatan Rilis
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▋ UPDATES:
Code optimizations.
Hid core coordination from output scale.
Rearrange indicator settings.
_______________________ ▋ OVERVIEW: — The standard deviation (σ) is only output scale value. (image below)
— User can get the best visualization by bringing the indicator to the front. (image below)
What are the chances there might be an update coming in the future that gives us more flexibility over the c
MUQWISHI
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@Blackthorn, Happy you like it. I appreciate your support. Thank you.
Blackthorn
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@MUQWISHI, oops, looks like it cut off my message! What I was trying to say was, is there any chance that a future update could include things like:
1. More customization around the colors - for example, maybe I don't want candles that are below 1.5 SD to have any color at all (so that more significant candles stand out that much more on my chart)?
2. Have you ever considered a concept of something like "window" periods? For example, when trading futures that have a well defined "open" and close, it shows pretty much all of the low-timeframe candles at the open as being extremely high SD relative to the low-volume overnight candles. A window period could compare, say, the 30 minutes of data during today's open to the same 30 minute window on previous week days. Does that make sense?
MUQWISHI
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@Blackthorn, That is a somewhat preference. Message me privately if you're interested in a service. Thanks.
elcomercianteinformal
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Well, undesrtanding that the average depends from a sample, in this case the periods of candles where you are apllying 14 this is not a kind of prof against market manipulation, cause the volatibility of the volumne is not the only indicator of market makers or whales to change the trend. But it doesnt means that wont work, if you... hey try this. Do you know about the pck, cpl and cpu, if you can throw it into a script, you will see how capable is the desviation to maintain a trend (possibility to scalp into a safe range), to go deeper (good to shor) and go higher (good to long). Good work and thanks to share the result of your knowledge and talent. Sorry about my few practiced english.
MUQWISHI
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@manuelalvaradopatella,
No worries. It seems clear to me what you're trying to refer to.
I recommended between 14 - 20 bars length because the average number of bars of chart pricing cycling from a clear pivot to pivot is usually between 14-20 bars. No, I apply 20 for lower timeframes. What I have presented in the chart is 5min with 20 bars in length. About the high volatility in the market these days, as I mentioned above in the table key, the trader should have knowledge in terms of the "Price Action and Volume".
I'm not very familiar with Cpk, Cpl, and Cpu, but I will get into them deeply to see what are they gonna brought to improve the indicator. Great Suggestion.
Always, I like to use this indicator to understand the movement of stock, not get into the trade blindly. For instance, when you find a stock that has 10 series bars red with Volume Standard Deviation around average, suddenly the Volume Standard Deviation spikes when the price reaches the lower of the previous day. Moreover, the market looks healthy at that moment. In this case, I will consider an entry because I understood how the price moves, and I expected it to go up because several reasons.
It is capable to practice it at all timeframes. Today, I used it in 15min timeframe, and mostly I use it at 1min - 5min. I'm planning to do an educational extension to this indicator to explain the possibility of using it.
Very valuable comment.Thank you.
elcomercianteinformal
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@MUQWISHI, Hi again and thanks for answering. Another question. Can I give a support to my description on a acumulation or distribution zone with long time candles? For example a red candle higher without a result on the volatibility of the price could be a sight of acumulation zone?
MUQWISHI
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@manuelalvaradopatella,
I'm having trouble following what you're referring to. I'm gonna answer based on my understanding.
Accumulation or Distribution phases usually start and end with powerful candles. However, the middle candles remaining sideways. Let us take an example in NIO. Check the chart below.
Please let me know if that what you were trying to ask
Thank you
What are the chances there might be an update coming in the future that gives us more flexibility over the c