This indicator calculates and displays the ratio between the current candle’s body size and the average body size of a specified number of previous candles.
It helps traders identify overbought or oversold conditions, as well as potential trend exhaustion or continuation signals.
With its user-friendly interface and customizable settings, the Candle Ratio MT5 Forex Indicator is suitable for both novice and experienced traders looking to improve their trading decisions.
Candle Ratio Indicator Chart Explanation
When applied to a price chart, the Candle Ratio MT5 Forex Indicator displays colored bars or lines that represent the ratio between the current candle’s body size and the average body size of previous candles.
The colors indicate different market conditions, such as green for bullish and red for bearish. Traders can interpret the indicator’s signals in several ways.
For instance, if the current candle’s ratio is significantly higher than the average, it may indicate a potential trend reversal or a strong continuation signal.
Conversely, a low ratio compared to the average could suggest a weakening trend or a possible market correction.
Candle Ratio Indicator: Buy Condition
Look for a bullish signal when the current candle’s ratio is significantly higher than the average body size of previous candles.
Confirm the buy condition with other bullish indicators or price patterns, such as bullish engulfing patterns or support bounces.
Consider entering a long position when the bullish signal aligns with the overall market trend.
I have been actively trading the financial markets since April 2012. Besides trading with my personal money I am a technical analyst in a mutual fund that has Rs. 1 billion in assets under management. At my leisure, I love attending live music, traveling, and partying with friends.
Risk Warning: Trading in the forex market is very risky. Thus, it is may not be for everyone. A highly leveraged position can work against the trader when the trade does not work as expected. Trading in the forex market can cause to lose a significant portion of the capital or all of the capital. It is crucial to learn about the trading and gain enough experience in the demo account before trading with real money. The trading strategies published on this website do not guarantee profit as the market is dynamic and unpredictable. The past performance of a strategy is not the indicative of future performance. Trend Following System will not accept any kind of liability or damage caused by trading the strategies published on this website.
