Hammer and Reverse Hammer Candles Highlight

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Hammer and Reverse Hammer Candles Highlight Indicator

The Hammer Candle Highlight Indicator is a visual tool designed to identify and highlight hammer candles on the chart. Hammer candles are a significant price action signal, often associated with potential reversals or strong buying pressure, and are characterized by a long lower wick relative to the body size.

Core Features:
Hammer Candle Detection:

Identifies candles where:
The lower wick is at least 3 times the size of the body (customizable via settings).
The upper wick is smaller than or equal to the body.
Customizable Wick-to-Body Ratio:

The user can adjust the ratio to control the sensitivity of hammer detection.
Default ratio is set to 3.0.
Default ratio is set to 2.5.
Chart Highlighting:

Candles meeting the hammer criteria are highlighted with a semi-transparent background for easy visualization.
Alerts:

Alerts notify the user when a hammer candle is detected.
Use Cases:
Reversal Signal:

Hammer candles often indicate a potential bullish reversal after a downtrend.
They show strong buying interest after a period of downward pressure.
Support Level Confirmation:

Hammer candles forming near support levels may validate the level and indicate a strong bounce.
Trend Continuation:

In some cases, hammers within an uptrend may signal renewed buying momentum.
Customization Options:
Wick-to-Body Ratio:

Adjust the ratio (wickMultiplier) to fine-tune hammer detection.
Example: A ratio of 3.0 means the lower wick must be at least 3 times the size of the body.
Highlight Color:

Customize the background color (highlightColor) for hammer candles on the chart.
How It Works:
Calculations:

Body: Absolute difference between the candle's open and close.
Lower Wick: Distance between the lower of the open/close and the low.
Upper Wick: Distance between the higher of the open/close and the high.
Hammer Conditions:

Lower wick must be greater than or equal to 3 times the body size.
Upper wick must be less than or equal to the body size.
Visualization:

Candles meeting the criteria are highlighted on the chart.
Alerts:

Users can configure alerts for real-time notifications when hammer candles are detected.
Benefits:
Time-Saving:
Automates the identification of hammer candles, saving time and effort.
Customizable:
Flexible settings allow traders to adjust detection parameters to fit their strategy.
Actionable Insights:
Provides actionable signals for potential reversals or trend continuations.
Ideal For:
Traders relying on price action strategies.
Swing traders and scalpers looking for reversal signals near key levels.
Traders using support/resistance analysis or ICT trading concepts.
This indicator simplifies the process of detecting hammer candles, making it a valuable addition to any trader's toolkit. Let me know if you’d like further enhancements!