Explosive Candle Detector [CodeAlchemyLab]

Explosive Candle Detector

This indicator identifies potential high-momentum trading opportunities by detecting explosive candles that form after consolidation periods (base candles).

How It Works:
The indicator uses a two-candle pattern system:

1. Base Candle (Boring): A consolidation candle where the wicks are larger than the body, indicating indecision and potential accumulation/distribution by smart money. This represents a compression phase where price is being absorbed.
   
2. Explosive Candle: A momentum candle that appears immediately after a base candle, with a size at least 50% larger than the base candle. This represents an expansion phase where price breaks out with strong directional movement.
   

Features:
• Detects bullish explosive candles (green markers below candle)
• Detects bearish explosive candles (red markers above candle)
• Highlights base candles with background color
• Customizable explosive threshold (default: 50% size increase)
• Clean visual signals for easy pattern recognition

Trading Applications:
• Supply and Demand zone identification
• Breakout confirmation signals
• Momentum trade entries
• Order block detection
• Smart money accumulation/distribution phases

Best Used With:
Support/resistance levels, trend analysis, and volume confirmation for optimal trade setups.

Parameter:
Boring Candle Parameters:

1. Min wick ratio (0.6 = 60%): The total wicks (upper + lower) must be at least 60% of the candle's total range. Higher values = more wick required, meaning the candle is more "indecisive" with long wicks.

2. Max body ratio (0.4 = 40%): The body must be at most 40% of the candle's total range. Lower values = smaller body required, confirming the candle is mostly wicks with a small body.

Example: If candle range is 100 pips, wicks must be ≥60 pips and body must be ≤40 pips.

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Explosive Candle Parameters:

3. Min size vs Boring (1.5 = 150%): The explosive candle must be at least 1.5x (or 50% bigger) than the boring candle's range. If boring candle is 100 pips, explosive must be ≥150 pips.

4. Min body ratio (0.5 = 50%): The explosive candle's body must be at least 50% of its total range. This ensures it's a strong directional move with a large body, not just wicks.

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In Simple Terms:
• Boring candle = Big wicks, small body (consolidation/indecision)
• Explosive candle = Big body, much larger than boring candle (strong directional move)