The_Snowman wrote:Just to be clear on what I thought the concept of the Green / Red candle is, it is only the most recent CHANGE in color that applies
Here is an example of USDCAD, the indicator could show the candle that was the last time the color (Direction) changed
And it would stay on displayed until there is another color change, you could even have a training wheels message
When there is a change of color, trader is alerted and must decide if he will take the reversal position according to his own plan & risk.
So, indicator only need to show on 1 candle only in my opinion.
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Perhaps my interpretation is different. Two things can happen, continuation or reversal.
If at the top you have green, followed by red there are these possibilities:
If price breaks the top of the red or green candle, that would be continuation;
If price breaks the low of the green or red candle, that would be reversal.
Now, I can see what you may only want to use the latest color change. I feel you are missing out by not considering both.
When there is separation between the last red and last green, that shows a strong move. When there is overlap of the two, that shows a change in sentiment at the moment.
In you latest example, only taking the breakout of the white/green candle high could lead to loss because the black/red candle high has not been broken. I have had my fingers burned more than once taking that breakout. Now I know better. I may move up a time frame to check the candles or just wait for the black/red candle high to be broken.
Perhaps I don't understand the original intent. But I understand
what I SEE.
Thank you.
