The candle coloring feature allows the user to change the body color of the candles/bars when using candlesticks or bar charts. Three coloring modes are available, with two of them being based on the previously described signal methodologies.
Candle coloring also works on charts using Heikin-Ashi, Renko, Kagi, line break, point and figure, and range candles.
Each mode can be enabled from the settings in the candle color mode dropdown menu.
In order to use candle coloring as properly as possible make sure to disable the borders setting in your chart settings.
The confirmation simple color mode is based on the methodology used by confirmation signals and is the one enabled by default. This mode uses three colors, each one can be interpreted as follows:
Green candles: Strong buy active.
Red candles: Strong sell active.
Purple candles: Normal buy or sell signal active.
The confirmation gradient color mode is also based on the algorithm that generates confirmation signals, but will slightly differ from the previously described confirmation simple color mode.
Lighter green colors indicate strong bullish variations, while lighter red colors indicate strong bearish variations. Color closer to purple indicates that the current variation might be a retracement or that the market is ranging.
The LuxAlgo Premium indicator allows displaying custom candlesticks on your charts. These aim to remove the noise from a regular candlestick chart, thus making your analysis easier.
The color of each candlestick method is determined by the method selected in the Candle Coloring setting. When None is selected in the Candle Coloring setting the candlestick method selected in Candle Mode will use its own coloring method.
Kantan-Ashi is a candlestick method that removes short-term variations from the price. This method can be compared to Heikin-ashi candles but will return a higher degree of smoothness.
The Taki-Ashi candlestick method is one of the most complete available and can return a wide variety of information.
The Taki-Ashi method does not remove noisy variations from the price, but attenuate them visually with a design inspired by the histogram plot alongside a candle coloring highlighting the direction of the underlying trend in the price.
Candles with a lighter green or red color highlight potential retracement in a trend while candles with a less transparent color highlight price variations in accordance with the direction of the underlying trend in the price.
Multiple patterns can be observed with this candlestick method, gaps can highlight very sudden and volatile movement in the price. These are also highlighted by a candle with wicks, a bearish candle with a lower wick but no higher wick is a strong bearish continuation pattern, while a bullish candle with a higher wick but no lower wick is a strong bullish continuation pattern.
It is also possible to connect the candle wicks with lines to identify certain patterns more easily.
The Yumi-Ashi is a unique method that aims to keep a linear aspect to remove noisy variations from the price, only breaking its linear aspect when the price deviates significantly from a previous candle, thus highlighting volatile price variations.
Wicks are displayed when the price deviates moderately from a previous candle, with lower wicks highlighting downtrends and higher wicks highlighting uptrends.