[cowcool]

Based on my simple observation, a big green/red candle is usually followed by series of other green/red candles. Occurence of big green/red candle usually set panic/greed to retail traders and alert momentum traders to get in. Is my observation correct? (please correct me if I am wrong)

Based on this fact, I am going to create a script/program that will calculate the average size/range of all candles during the trading day. The purpose is to correctly determine the size of what people perceived as a big candle during that particular trading day.

But before putting some effort, I would like to know if there is readily available software/indicator for this purpose. I don't want to waste my time only to find out that there is readily software/indicator out there for that purpose.

Thx a million!

[Tams]

The indicator is called Average True Range (ATR)

more info here:
StockCharts.com - Average True Range (ATR)

[cowcool]

Thx Tams, is it true that a big green/red candle is usually followed by series of other green/red candles?. I want a confirmation from a veteran .

[brownsfan019]

cow - what you are referring to is what has been called a Wide Range Body (WRB). If you search on this forum or ET for wide range body, you'll find a few threads out there. Here is a thread that was popular at one point.

If you want to take it a step further, contact NihabaAshi who sells a course that deals w/ WRBs last time I checked. It's been awhile, so double check that.

IMO there is value in WRBs; however, as you'll see if you read that thread, how you interpret them can be rather difficult - sometimes those WRBs give you excellent entry/exit points and other times they don't do much. If you can decipher when to use them and when to ignore, that alone could be very powerful. Personally, I never got there. I am observant of WRBs now, but they are not a big factor in my plan.

[ceydababy]

Originally Posted by cowcool »

Thx Tams, is it true that a big green/red candle is usually followed by series of other green/red candles?. I want a confirmation from a veteran .

I reckon you have a fifty fifty chance of a big candle being followed by a big move. Often you can see a big green candle followed by several red ones and a failed move.

You should maybe filter them by where on the chart they happen. If you're at a point where you're expecting a turn or a continuation then there is probably more weight in the signal. However, in my humble opinion just hitting long or short after a big green or red bar is a recipe for disaster.

[cowcool]

I am using 1 minute time frame and talking about huge candle that is 4-5 times bigger than the size of average normal candles, isn't this indicate that there are buying/dumping by instituionals or big traders? Ofcourse I maybe wrong. comments please

[brownsfan019]

Originally Posted by cowcool »

I am using 1 minute time frame and talking about huge candle that is 4-5 times bigger than the size of average normal candles, isn't this indicate that there are buying/dumping by instituionals or big traders? Ofcourse I maybe wrong. comments please

It could indicate 1 of 2 things:

1) Big buying/selling entering, time to jump on the move

2) Quick profit covering taking place and you want to fade it

The WRB thread I linked discusses all of this. Go through that thread and then post some questions.

[sep34]

Cowcool,

Your notice of "big green/Red" (White & Dark) candles or as BF refered to them as "WRB" is not in vien, However its not as simple as just being a buy/sell signal.

There is not a software that Im aware of that deals with this...Therefore you can go at it.

There should be some posts around this forum about "WRB" as well ... I remeber seeing them a long time ago, more then a year or even longer. You can search for it.