Candlestick dynamics
Even if candlesticks appear to be the same at first glance, there are differences in the frequency of value updates when tick value movements are included.
By adding up the range of price movements (either up or down) when a single candlestick is formed and visualizing it as a histogram,
I thought it would be helpful in identifying trend turning points.
Interesting approach. What you're suggesting is similar to measuring the "internal volatility" of each candle by summing the range of all ticks.
This could give extra insight compared to indicators like ATR, especially to spot candles with heavy internal activity that is not obvious from their final size. It would be interesting to see if applying it on different timeframes and symbols can reliably anticipate turning points.
- Calm candles > low value on the histogram > low internal volatility.
- Agitated candles > high value on the histogram > possible change in momentum or price rejection.
This is similar to measuring trading volume (not to be confused with transaction volume) and can complement ATR-type volatility analysis, but with more detail at the tick level.
Good work! 🙏🏻
Interesting approach. What you're suggesting is similar to measuring the "internal volatility" of each candle by summing the range of all ticks.
This could give extra insight compared to indicators like ATR, especially to spot candles with heavy internal activity that is not obvious from their final size. It would be interesting to see if applying it on different timeframes and symbols can reliably anticipate turning points.
- Calm candles > low value on the histogram > low internal volatility.
- Agitated candles > high value on the histogram > possible change in momentum or price rejection.
This is similar to measuring trading volume (not to be confused with transaction volume) and can complement ATR-type volatility analysis, but with more detail at the tick level.
Good work! 🙏🏻
The thing is that one candlestick can be packed with chaotic tick movements that don’t reflect a meaningful market sentiment. Over many years (in the underground haha), people developed tick trend indicators on ticks time. People made a tick stochastic, tick moving average and so on. In this way you might see a bullish trend or bearish for just a few seconds. It doesn't mean much to normal traders other than potentially getting a sharper entry, but a trend that lasts a few seconds can be significant in high frequency trading. You can think of these "tick trend" indicators as a much more elaborate tick chart as they separate buyers ticks from sellers ticks
Thank you for your comment.
It seems I don't have enough knowledge about tick trend indicators.
Indeed, I can't find an entry point in the histogram above.
(The same situation occurs even if I calculate the average of price movement.)
It seems I need to investigate past research on tick indicators.
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Even if candlesticks appear to be the same at first glance, there are differences in the frequency of value updates when tick value movements are included.
By adding up the range of price movements (either up or down) when a single candlestick is formed and visualizing it as a histogram,
I thought it would be helpful in identifying trend turning points.