Trend Scalper Candles
The trend scalper candles are used to identify short-term trends based on the readings of the MACD, RSI and ATR indicators. All indicator calculations are visualized by candle colors which are overlapped on the chart.
The indicator uses gray, green and red colors to paint individual candles, which gives you a lot of useful and easy to read information.
Gray candles
Gray candles indicate a range bound period and the information can be used to trade breakouts. Simply mark the high and low of the range and trade the breakout which is in line with the current trend.
I recommend identifying the longer term trend by using 150 & 200 EMAs on the H4 charts. Everything above the 2 EMAs is considered an up trend and everything below a down trend.
Green candles
- Green candles indicate an up trend
- Green candles with a green dot below the candle low indicate a strong up trend
A dot below the green candle can be used as a visual prompt to move your stop loss to this level and lock in some profit. The distance of the dot from the low of the candle is calculated using ATR parameters.
Red candles
- Red candles indicate a down trend
- Red candles with a red dot above the high of the candle indicate a strong down trend
A dot above the red candle can be used as a visual prompt to move your stop loss to this level and lock in some profit. The distance of the dot from the high of the candle is calculated using ATR parameters.
Parameters
- ATR period
- ATR multiple
- MACD fast EMA setting
- MACD slow EMA setting
- MACD signal period setting
- MACD applied price
- RSI period
- RSI applied price
The ATR parameters are used for calculating the recommended stop loss value for trailing stops in a strong trend.
The MACD & RSI parameters are used to calculate the current micro trend and the strength of the move.
