Candle colour is a lazy summary

[Fairman]

Candle colour is a lazy summary

A green candle means the close was above the open. That says nothing about how it got there.

A green candle that spent most of its life below the open and rallied in the final seconds is not the same as one that climbed steadily. The first signals buyers stepping in late. The second signals steady demand.

Scalpers working with candle patterns, engulfing bars, pin bars, and the like are reading summaries. The same pattern can come from very different underlying paths.

A way to add information is to look at how much time the price spent in each part of the candle. A close near the high after spending most of the time near the low is a different animal from a close near the high after hugging it all along.

Some traders compute the time-weighted average price within a bar and compare it with the close. The gap tells where the bar's real centre of gravity was.

It is extra work, but it shows how much a simple colour hides.

Does the strategy treat all green candles the same, regardless of how they formed?