Strength Candles Indicator is a technical analysis tool that was developed by trader and analyst John Bartlett. It was first introduced in his book “Trading Price Action Trends” in 2010. The indicator is designed to help traders identify the strength of a trend and make informed trading decisions based on this information.
What is the Strength Candles Indicator?
The Strength Candles Indicator works by analyzing the size and direction of price movements within a given time period, typically a candlestick on a chart. It then assigns a value to these movements, with larger and more sustained price movements being assigned higher values. The indicator then plots these values on the chart, creating a visual representation of the strength of the trend.
The Strength Candles Indicator is based on the idea that strong trends are characterized by large and sustained price movements, while weaker trends are characterized by smaller and less sustained movements. By identifying the strength of a trend, traders can make informed decisions about whether to enter or exit a trade based on the likelihood of the trend continuing.
- It is based on the idea that trends are characterized by large and sustained price movements, which can be a reliable indicator of the strength of a trend.
- It assigns a value to price movements, making it easier to compare the strength of different trends and make informed trading decisions.
- It provides a visual representation of the strength of a trend, which can be helpful for traders who prefer visual analysis.
- It can be applied to any time frame, making it flexible and adaptable to different forex trading strategies.
Strength Candles Strategy
Buy Signal
- The indicator shows a series of large, sustained price movements to the upside.
- The indicator value remains consistently high over a prolonged period of time.
- The indicator value is consistently higher than the values of previous trends.
- The indicator value breaks above a key resistance level, indicating a potential breakout to the upside.
Sell Signal
- The Strength Candles Indicator displays a series of significant and prolonged price declines.
- The indicator’s readings consistently remain at low levels for an extended period.
- The indicator’s values are consistently lower compared to previous trends.
- The indicator’s values fall below a crucial support level, suggesting a potential downward breakout.
Strength Candles Indicator Pros & Cons
Pros
- It is based on a clear and well-defined trading strategy, which can make it easier to understand and apply.
- It provides a visual representation of the strength of a trend, which can be helpful for traders who prefer visual analysis.
- It can be applied to any time frame, making it flexible and adaptable to different trading strategies.
- It can help traders identify strong trends and make informed trading decisions based on this information.
Cons
- It may not be as effective in identifying trends in highly volatile or range-bound markets.
- May not be ideal for certain trading strategies because they can add unnecessary complexity by displaying too much information.
- It can lead traders to overestimate their understanding of the market and develop false confidence in their trading decisions.
- It may be more complex and harder to interpret than other technical indicators.
Conclusion
The Strength Candles Indicator is a technical analysis tool that helps traders identify the strength of a trend and make informed trading decisions based on this information. It is based on the idea that strong trends are characterized by large and sustained price movements, while weaker trends are characterized by smaller and less sustained movements. By analyzing the size and direction of price movements and assigning a value to these movements, the indicator creates a visual representation of the strength of the trend. This can be useful for traders who prefer visual analysis and can be applied to any time frame, it may not be as effective in highly volatile or range-bound markets and may generate false signals if market conditions change unexpectedly. It may also be more complex and harder to interpret than other technical indicators.
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