Introduction to the Candle Ratio Indicator
The Candle Ratio indicator measures the ratio that exists between the bullish and bearish candlesticks over the defined period of time.
It consists of two lines which are colorized red (smoother line) and green (sensitive line).
The indicator is displayed in a separate window placed just below the main trading chart.
It fits all kinds of timeframes and currency pairs.
The default indicator settings can be modified directly from the input tab. Feel free to experiment with the settings and parameters to fit your personal preferences. Let’s take a closer look at these inputs below.
Period – defines the period for calculation;
Smoothing period – defines the period of smoothing;
Method – defines the method of smoothing.
The formula for the Candle Ratio indicator:
The calculations of the Candle Ratio indicator are based on the following formula:
Up = close-open;
Dow n= 0;
Down = open-close;
Up = 0;
Ratio = Sum(Up) / Sum (Down);
How to use the Candle Ratio indicator:
The signals provided by that gauge are simply crossover, and it looks as follows. The price is considered to be bullish when the green line cross above the red line. Similarly, the price is considered to be bearish when the green line cross below the red line.
We do not recommend using that gauge as a standalone trading tool. Rather use it in conjunction with some other technical analysis forex indicators.
How to set up the Candle Ratio indicator in MT5?
Copy and paste the Candle_Ratio.mq5 or Candle_Ratio.ex5 indicator files into the MQL5 folder of the Metatrader 5 trading platform.
You can gain access to this folder by clicking the top menu options, which goes as follows:
File > Open Data Folder > MQL5 > Indicators (paste here).
Now go to the left side of your MT5 terminal. In the Navigator find the gauge name, right-click it and select Attach to the chart.
The Candle Ratio indicator is well worth adding to your trading collection but remember about having realistic expectations. Just like any other technical analysis tool, is not capable of providing accurate signals 100% of the time. Thus, this forex indicator provides false signals occasionally. Its performance will vary significantly depending on market conditions. Feel free to develop your own trading system based around it.
Candle Ratio Indicator Free Download
To download the Candle Ratio Indicator for Metatrader 5 (MT5) for free just click the button below: