Colors candles based on delta momentum — highlights initiative buying/selling and absorption
Delta Candle Color colors candles based on delta (CVD) momentum relative to price movement. It highlights two key market microstructure signals: initiative buying/selling (sync) and absorption (divergence).
When price moves in the same direction as delta, and the bar delta exceeds a configurable threshold, the candle is colored to highlight initiative activity:
The threshold is a multiplier of the rolling average absolute delta. Higher multiplier = only the strongest sync signals are highlighted.
When delta moves against price direction with significant magnitude, it signals absorption — passive orders absorbing the initiative flow:
Absorption candles are colored with a separate configurable color (default: white).
Bar delta is computed directly from bid and ask volume data — no external CVD study is needed. The study then computes a rolling moving average of absolute bar delta over N bars. Thresholds are expressed as multipliers of this average, making the study self-adjusting across different instruments and volatility regimes.
| Setting | Default | Description |
|---|---|---|
| Bullish Color | Blue | Sync candle color (price up) |
| Bearish Color | Red | Sync candle color (price down) |
| Delta MA Length | 20 | Rolling average period |
| Sync Threshold Multiplier | 2.0 | Minimum delta for sync signal |
| Absorption Threshold Multiplier | 0.5 | Minimum delta for absorption signal |
| Absorption Color | White | Color for absorption candles |