Enhanced Candle Sticks [AlgoAlpha]

27 Jan

🚀🌟 Introducing the Enhanced Candle Sticks by AlgoAlpha, a Pine Script tool designed to provide traders with an enhanced view of market dynamics through candlestick analysis. This script aims to visualise if price has hit the high or low of the candle first, aiding in back-testing, and to identify smaller trends using market structure.📊🔍

Key Features:

• Timeframe Flexibility: Users can select their desired timeframe for analysis, offering a range of options from M15 to H12. This flexibility allows for detailed and specific timeframe analysis.
  
• Micro Trend Identification: The script includes an option to enable 'MicroTrends', giving traders insights into smaller movements and trends within the larger market context.
  
• Customizable Visuals: Traders can customize the colors of bullish and bearish candlesticks, enhancing visual clarity and personalizing the chart to their preferences.
  
• State Tracking: The script tracks the 'state' of the market on lower timeframes to detect if the high or the low was formed first.
  
• Warning System: When the selected timeframe does not match the chart timeframe, the script generates a warning, ensuring accurate analysis and preventing potential misinterpretations.
  

Usages:

• Enhanced Back-testing: Users can now get a more accurate interpretation of the candlesticks by know if the high or the low came first (denoted with ⩚ or ⩛), especially in scenarios where the high and the low of the larger timeframe candle is touching both the take-profit and stop-loss levels.
  
• Squeeze Analysis: Users can identify squeezes in price when the microtrend shows both an uptrend and a downtrend, possibly giving more insight into the market.
  
• Lower Timeframe Market Structure Analysis: Microtrends form when the low of the candle is consecutively increasing and the high is consecutively falling, which means on a lower timeframe, price is forming higher lows or lower highs.
  

Basic Logic Explanation:

- The script starts by setting up the necessary parameters and importing the required library. Users can customize the timeframe, colors, and whether to enable micro trends and candlestick plotting.

- It then calculates the lower timeframe (1/12th of the current timeframe) for more detailed analysis. The `minutes` function helps in converting the selected timeframe into minutes.

- The script tracks new bars and calculates the highest and lowest values within an hour, using `ta.highestSince` and `ta.lowestSince`.

- It determines the market 'state' by checking if the current high is breaking the previous high and if the current low is breaking the previous low on lower timeframes to determine if the high or the low was formed first.

- The script uses the `plotchar` and `plotcandle` functions to visually represent these trends and states on the chart. This visual representation is key for quick and effective analysis.

Alerts:
Alerts can be set for microtrend formations:


This script is a valuable tool for traders looking to deepen their market analysis with enhanced candlestick visualization and micro trend tracking. 📈🔶💡