Smart Trader, Episode 03, by Ata Sabanci, Candles and TradelinesA volume-based multi-block analysis system designed for educational purposes. This indicator helps traders understand their current market situation through aggregated block analysis, volumetric calculations, trend detection, and an AI-style narrative engine.
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DESIGN PHILOSOPHY: CLEAN CHART, RICH DASHBOARD
Traditional indicators often clutter charts with dozens of support/resistance lines, making it difficult to see price action clearly. This indicator takes a different approach:
The Chart:
Displays only the most meaningful, nearest levels (1 up, 1 down) that have not been consumed by price. This keeps your chart clean and focused on what matters right now.
The Dashboard:
Contains all detailed metrics, calculations, and analysis. Instead of drawing 20 lines on your chart, you get comprehensive data in an organized table format.
Why this approach?
• A clean chart allows you to see price action without visual noise
• Fewer but more meaningful levels help focus attention on immediate reference points
• The dashboard provides depth without sacrificing chart clarity
• Beginners can learn chart reading with an uncluttered view while accessing detailed analysis when needed
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1. BLOCK SEGMENTATION
What it does:
Divides the analysis window into fixed-size blocks. Each block contains multiple bars that are analyzed as a single unit.
Why:
Individual bars contain noise. A single red candle in an uptrend might cause unnecessary concern, but when you view 5-10 bars as one block, the overall direction becomes clear. Block segmentation filters out bar-to-bar noise and reveals the underlying structure.
Benefit:
• Clearer view of market structure at a higher aggregation level
• Enables comparison between time periods (Block 1 vs Block 2 vs Block 3)
• Creates the foundation for composite candles and trend detection
• Reduces emotional reaction to single-bar movements
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2. COMPOSITE CANDLES (FRACTAL CONCEPT)
What it does:
Each block generates a "ghost candle" representing aggregated OHLC:
• Open: First bar's open in the block
• High: Highest high across all bars in the block
• Low: Lowest low across all bars in the block
• Close: Last bar's close in the block
Why:
This is essentially a FRACTAL view of the market. The same candlestick patterns that appear on a daily chart also appear on hourly charts, and on 5-minute charts. By aggregating bars into composite candles, you create a synthetic higher timeframe view without changing your actual timeframe.
Benefit:
• See higher timeframe patterns while staying on your preferred timeframe
• Identify block-level candlestick patterns (Doji, Hammer, Marubozu, Engulfing, etc.)
• Compare composite candle relationships: Does Block 1 engulf Block 2? Is Block 1 an inside bar relative to Block 2?
• Recognize patterns that individual bars obscure due to noise
Fractal Nature:
A hammer pattern means the same thing whether it appears on a 1-minute chart or a weekly chart: price tested lower levels and was rejected. Composite candles let you see these patterns at your chosen aggregation level, providing a multi-scale view of market behavior.
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3. VOLUME ENGINE
What it does:
This indicator is 100% VOLUME-BASED. It separates total volume into buying volume and selling volume using two methods:
Method 1 - Geometric (Approximation):
• Buy Volume = Total Volume × ((Close - Low) / Range)
• Sell Volume = Total Volume × ((High - Close) / Range)
Method 2 - Intrabar LTF (Precise):
Uses actual tick-level or lower timeframe data to determine real buy/sell distribution.
Why:
Raw volume tells you HOW MUCH was traded, but not WHO was aggressive. A large volume bar could mean heavy buying, heavy selling, or both. By separating buy and sell volume, you can identify which side is driving the market.
Benefit:
• Identify whether buyers or sellers are more aggressive
• Detect when volume contradicts price direction (divergence)
• Measure accumulation (buying into weakness) vs distribution (selling into strength)
• Quantify the delta (buy minus sell) to see net pressure
Why Delta Matters:
If price is rising but delta is negative, sellers are actually more aggressive despite the price increase. This divergence often precedes reversals because the price movement lacks volume confirmation.
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4. PIN ANALYSIS (WICK MEASUREMENT)
What it does:
Calculates average upper pin (wick) and lower pin sizes for each block, then tracks how these change across consecutive blocks.
Why:
Upper pins represent price levels that were tested but rejected by sellers. Lower pins represent price levels that were tested but rejected by buyers. The size and direction of pins reveal rejection strength at specific price zones.
Benefit:
• Large upper pins = strong selling pressure at higher levels
• Large lower pins = strong buying support at lower levels
• Increasing upper pins across blocks = intensifying selling pressure
• Decreasing lower pins across blocks = weakening buying support
Why Track Pin Changes:
Pin behavior often changes before price direction changes. If lower pins are shrinking while price is still rising, the buying support that was defending dips is weakening. This is observable data, not prediction.
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5. TREND CHANNEL DETECTION
What it does:
Identifies trend direction using block-level price structure:
• UPTREND: Block highs are higher than previous block highs, AND block lows are higher than previous block lows (HH/HL pattern)
• DOWNTREND: Block highs are lower than previous block highs, AND block lows are lower than previous block lows (LH/LL pattern)
• RANGE: No consistent directional pattern
Once detected, the system draws upper and lower channel boundaries by connecting extreme points within each trend segment.
Why:
HH/HL and LH/LL are the classical definitions of trend. By applying this logic to composite candles (blocks) rather than individual bars, the trend detection becomes more stable and less prone to whipsaws from single-bar noise.
Benefit:
• Clear visual boundaries showing the current trend channel
• Upper channel line = dynamic resistance based on actual price structure
• Lower channel line = dynamic support based on actual price structure
• Channel angle indicates trend strength (steeper = stronger)
• Channel width indicates volatility
Why Lock Trend States:
Once a block's trend classification is determined, it locks and does not change on subsequent recalculations. Without locking, the same block could flip between UP and DOWN repeatedly, creating inconsistent analysis. Locking ensures stability.
Why Project Lines Forward:
Channel lines can be projected into the future to show where support/resistance would be if the current trend continues at the same angle. This is not a prediction; it is a visual reference showing the trend's trajectory.
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6. CORE LEVELS: POC, MAX BUY, MAX SELL
What it does:
Identifies key price levels within each block based on volume data:
POC (Point of Control):
The price level where the highest total volume occurred within the block.
MAX BUY Level:
The bar with the highest buying volume. The HIGH of this bar marks the level.
MAX SELL Level:
The bar with the highest selling volume. The LOW of this bar marks the level.
MIN BUY/SELL Levels:
Optional levels showing where minimum buy/sell volume occurred.
Why:
High volume at a specific price means many participants entered positions there. These participants have a vested interest in that price level. If price returns to that area, those same participants may act to defend their positions.
Benefit:
• POC acts as a volume-based magnet; price tends to revisit high-volume areas
• MAX BUY level shows where buyers committed most aggressively
• MAX SELL level shows where sellers committed most aggressively
• These levels are based on actual transaction data, not arbitrary calculations
Why Consumed Levels Disappear:
When price crosses through a level, that level has been "tested." Keeping consumed levels on the chart creates visual clutter and suggests they are still relevant when they may no longer be. Removing them keeps focus on levels that have not yet been tested.
Why Show Only Nearest Levels:
If you have 20 blocks, you could have 60+ potential levels (POC, MAX BUY, MAX SELL for each). Displaying all of them makes the chart unreadable. Showing only the nearest untested level above and below current price keeps the chart clean while providing immediate reference points.
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7. QUALITY SCORE AND TREND INTELLIGENCE
What it does:
Calculates a quality score (0-100) for the current trend based on multiple factors:
• Angle steepness (stronger trends have steeper angles)
• Delta consistency (does volume support the trend direction?)
• Volume momentum (is participation increasing or decreasing?)
• Body expansion (are candle bodies growing or shrinking?)
• Pin alignment (do pins support the trend direction?)
• Contradiction count (how many factors disagree?)
Why:
Not all trends are equal. A trend with consistent volume support, expanding bodies, and aligned pins is healthier than a trend with contradicting signals. The quality score quantifies this.
Benefit:
• HIGH quality (80+): Multiple factors confirm the trend
• MEDIUM quality (60-79): Some factors confirm, some neutral
• LOW quality (below 60): Multiple contradictions exist
• Strength rating based on channel angle: VERY STRONG, STRONG, MODERATE, WEAK
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8. NARRATIVE ENGINE
What it does:
Generates a text-based market analysis by synthesizing all calculated data into readable sentences.
How it works:
1. Analyzes current candle: pattern type (Doji, Hammer, Marubozu, etc.), body/wick ratios, range vs ATR
2. Analyzes composite candle: Block 1 pattern and relationship to Block 2 (Engulfing, Inside, Outside)
3. Evaluates trend context: direction, duration, quality, transitions
4. Examines volume data: delta, dominance, momentum direction
5. Checks proximity to key levels: channel boundaries, POC, core levels
6. Identifies divergences: when price and volume directions contradict
7. Produces a coherent narrative describing the current situation
Why:
Numbers and charts require interpretation. The narrative engine translates calculated data into plain language, helping traders understand what the data means in context. This is especially valuable for beginners learning to read charts.
Benefit:
• Synthesizes multiple data points into a coherent story
• Explicitly flags divergences and contradictions
• Describes the current situation without making predictions
• Educational: shows how different factors relate to each other
What the Narrative Does NOT Do:
The narrative describes what IS, not what WILL BE. It does not predict future price movement. It reports the current candle pattern, the current trend state, the current volume situation, and the current proximity to levels.
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9. SMART DASHBOARD
What it does:
Displays all metrics in an organized table with multiple sections.
Sections:
• Volume Engine: Calculation method, data availability, current candle buy/sell/delta
• Trend Volumetrics: Aggregated buy/sell/delta across the current trend, trend type
• Pressure and Momentum: Average pins, pin change percentages, body expansion status
• Trend Channel Boundaries: Upper/lower levels with exact prices, distances, percentages
• Trend Intelligence: Quality score, confidence level, strength rating, volume momentum
Why:
All the detailed calculations need to live somewhere without cluttering the chart. The dashboard provides comprehensive data in a structured format.
Benefit:
• All metrics in one place
• Organized by category for easy reference
• Hover over any label to see a tooltip explaining that metric
• No need to draw dozens of lines on the chart
TIP: Hover over dashboard headers and labels to see tooltips explaining each metric.
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10. LANGUAGE SUPPORT
The indicator supports three languages:
• English
• Türkçe (Turkish)
• हिन्दी (Hindi)
Why only three languages?
Each additional language requires duplicate strings throughout the code, increasing memory usage and compilation time. To keep the script optimized and responsive, language options are limited to these three.
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11. DATA ACCURACY AND LIMITATIONS
This indicator is 100% VOLUME-BASED and requires Lower Timeframe (LTF) intrabar data for accurate calculations.
DATA ACCURACY LEVELS:
• 1T (Tick): Most accurate, real volume distribution per tick
• 1S (1 Second): Reasonably accurate approximation
• 15S (15 Seconds): Good approximation, longer historical data available
• 1M (1 Minute): Rough approximation, maximum historical data range
BACKTEST AND REPLAY LIMITATIONS:
• Replay mode results may differ from live trading due to data availability
• For longer backtest periods, use higher LTF settings (15S or 1M)
• Not all symbols/exchanges support tick-level data
• Crypto and Forex typically have better LTF data availability than stocks
A NOTE ON DATA ACCESS:
Higher TradingView plans provide access to more historical intrabar data, which directly impacts the accuracy of volume-based calculations. More precise volume data leads to more reliable calculations.
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12. SETTINGS OVERVIEW
Main Settings:
• Window Bars: Total bars to analyze
• Group Count: Number of blocks to create
• Calculation Basis: Current bar (live updates) or Closed bar (stable, no repaint)
Block Analytics:
• Show Composite Candle: Toggle ghost candles on/off
• Composite Candle Transparency: Adjust visibility
• Dim Original Candles: Fade original candles when composites are shown
Volume Engine:
• Calculation Method: Geometric (approx) or Intrabar (precise)
• Lower Timeframe: Select LTF for intrabar calculations
Multi-Segment Trend:
• Enable Trend Detection: Toggle trend channels on/off
• Range Angle Threshold: Angle below which trend is classified as RANGE
• Line colors, width, and style
• Project to Future: Extend trend lines forward
Core Calculation:
• Enable Core Calculation: Toggle POC and core levels
• Show POC Nearest Up/Down: Display nearest untested POC levels
• Include MAX/MIN Buy/Sell Levels: Toggle extremes display
• Nearest Only: Show only the closest level above and below price
Market Narrative:
• Enable Market Narrative: Toggle narrative text
• Language selection
• Show Educational Disclaimer: Toggle disclaimer in dashboard
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EDUCATIONAL PURPOSE
This indicator is designed to help traders:
1. Understand their current market situation at a glance
2. Learn chart reading through block analysis and composite candles
3. See how volume relates to price movement
4. Recognize when technical factors align or contradict
5. Focus on meaningful levels without chart clutter
Whether you are a beginner learning to read charts or an experienced trader seeking a cleaner analytical view, this tool provides structured data to support your analysis.
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IMPORTANT DISCLAIMER
This indicator is for EDUCATIONAL PURPOSES ONLY and does not constitute investment advice. Always conduct your own research and consult with a qualified financial advisor before making investment decisions.
This disclaimer is also displayed within the indicator itself. If you prefer a cleaner chart, you can disable it in Settings under Market Narrative by unchecking Show Educational Disclaimer.
Pine Script®指標
