Long Wick Detector [LuxAlgo]

The Long Wick Detector tool allows traders to identify candle wicks longer than a user-defined volatility threshold. This makes it useful for spotting zones with high supply or demand.

The tool displays mitigated and unmitigated levels and changes the color of the candles based on wick size and level breakouts.

🔶 USAGE



By default, the tool displays long mitigated and unmitigated candle wicks, with a maximum duration for an unmitigated long wick of 1,000 bars. What does all this mean?

🔹 Wick Threshold



Traders can adjust the volatility threshold to identify long wicks, with a higher threshold detecting more significant wicks.

As we can see in the image above, the tool detects more wicks with a smaller threshold compared to a higher one.

🔹 Level %



Traders can choose the percentage of the wick at which the level is located. By default, the level is displayed at the extremes of the wick. This parameter accepts values between 0 and 100.

• 100: extreme of the wick
  
• 50: middle of the wick
  
• 0: start of the wick
  

🔹 Max Duration



This parameter allows traders to specify the number of bars for the levels. The tool will only display mitigated or unmitigated levels up to the specified number of bars.

As shown in the above image, a longer duration allows more room for mitigation, displaying more levels.

🔹 Colored Candles



The tool allows for color customization using two parameters from the settings panel. The chart shows the different outputs.

The setting "Wick-Based Transparency" makes candles with smaller wicks less visible and candles with longer wicks more visible.

On the other hand, "Breakout-Based Color" changes the base color of the candles based on the mitigation of long wicks. When the price breaks above a detected top wick, the bullish color is used. When the price breaks below a detected bottom wick, the bearish color is used.

🔶 SETTINGS

• Wick Threshold: The volatility threshold for wick detection. Use a smaller value to detect smaller wicks.
  
• Level %: Placement of the plotted level relative to the wick.
  
• Max Duration: The maximum duration in bars of mitigated wicks.
  
• Mitigated Wicks: Enable or disable mitigated wicks.
  

🔹 Style

• Wick Based Transparency: Make candles with smaller wicks more transparent and candles with longer wicks more solid.
  
• Breakout Based Color: Change the base color based on wick mitigation.
  
• Bullish & Bearish Colors