# Candle Coloring ## Candle Coloring — Trader Guide (EN) > **mrD Signals Premium** — How to **read and use candle colors** to instantly identify market regime (trend / sideways) without needing to look at additional indicators. ***
### 1. What is Candle Coloring? This feature **paints the entire candle body** on your chart based on the **trend logic** of the active signal mode. At a glance, traders know: * **Which side of the trend** they're on (buyers or sellers winning) * **Whether the trend is healthy or weakening** (via color continuity) * **Whether it's sideways** (purple = no trend) > **Goal:** Instead of needing to look at 5 indicators to identify regime, **the candle color alone** is enough. *** ### 2. The Palette — Just 3 Colors
| Color | Meaning | Recommended Action | | ------------- | -------------------------------------------- | ------------------------------------- | | 🟢 **Green** | Trend logic is **bullish** — buyers winning | Prefer LONG, avoid counter-trend SELL | | 🔴 **Red** | Trend logic is **bearish** — sellers winning | Prefer SHORT, avoid counter-trend BUY | | 🟣 **Purple** | **Neutral / sideways** — no clear trend | DO NOT enter — wait for clear regime | | ⚪ No color | Mode = "None" or Candle Coloring is off | — | > **Golden rule:** If a candle is **purple**, even if a signal triangle fires, you should **skip it** — that's a sign the market is consolidating, and signals during this period often fail. *** ### 3. The 3 Color Engines — Auto-Selected by Signal Mode Each signal mode has its **own color engine**, designed to be consistent with the mode's signal logic. You don't need to choose — the system automatically applies the right engine when you switch modes. #### Engine A — Waves Trend Mode **Logic:** Uses the chart timeframe's Wave Trend Filter. * Green when price is **above** the filter line AND momentum is rising. * Red when price is **below** the filter line AND momentum is falling. * Purple when price is choppy around the filter (sideway sign). **Characteristics:** **Fast-reacting** to chart TF — suits scalp/day-trade. May flip color during short pullbacks — that's the natural behavior of fast trend-following. #### Engine B — Advanced (MTF Confluence) **Logic:** Requires **chart TF AND HTF (higher timeframe) to agree** before changing color. * Green when both chart TF AND HTF are bullish. * Red when both chart TF AND HTF are bearish. * Purple when the two timeframes disagree (chart one way, HTF the other). **Characteristics:** **Highly stable** — color rarely flips, only changes when both timeframes confirm a new trend. Suits swing/position trading. When a candle transitions from purple → green/red in this mode, it's a **very strong regime change signal**. #### Engine C — Contrarian Mode **Logic:** Uses a **composite trend score** (combining EMA fast/slow + RSI50 + position vs support/resistance). * Green when composite score leans bullish. * Red when composite score leans bearish. * Purple when composite score is near 0 (regime unclear). **Characteristics:** For counter-trend traders — color tells the "main flow" so you know which direction to fade. *** ### 4. 5 Important Color Patterns #### Pattern 1 — Continuous Color Sequence
``` 🟢🟢🟢🟢🟢🟢🟢 ← strong trend, no noise ``` **Meaning:** Trend is running strong, momentum is high. This is the **optimal condition** to hold positions and trail stops. **Action:** If you're in a trade → hold. If not → enter on the first pullback to EMA / Trend Cloud. #### Pattern 2 — Color Flip
``` 🔴🔴🔴🔴 → 🟣 → 🟢🟢🟢🟢 ``` **Meaning:** Regime change — old trend ended, new trend forming. **Action:** **Wait for 2-3 same-color candles** before entering to confirm the flip is real. Entering on the first candle = risk of fake flip. #### Pattern 3 — Color Choppy
``` 🟢🔴🟢🔴🟣🔴🟢🟣 ← sideway / chop ``` **Meaning:** Market is sideways or whipsawing. Signals during this phase have low quality. **Action:** **DO NOT TRADE.** Wait for the market to pick a direction. #### Pattern 4 — Purple Cluster (long purple stretch)
``` 🟢🟢🟣🟣🟣🟣🟣🟣 ← trend weakening ``` **Meaning:** Old trend is **losing momentum** — preparing for regime change or extended sideways. **Action:** If in a position → consider TP (especially in Advanced mode). Wait for clear signal before reversing. #### Pattern 5 — Counter-color Single
``` 🟢🟢🟢🟢🔴🟢🟢🟢 ← 1 red candle in a green sequence ``` **Meaning:** **Normal pullback** in main trend. Not a reversal. **Action:** **Entry opportunity** with the main trend. Place limit order at the low of the counter-color candle or at the nearest EMA. *** ### 5. Combining Candle Color with Signals #### A+ / A / B / C Rating System When a signal triangle fires, check the candle color at that bar: | Situation | Rating | Action | | ------------------------------------------- | ----------------- | --------------------------------------------------- | | BUY triangle 🔺 + **green** candle | ⭐⭐⭐⭐⭐ A+ | Full size, reasonable leverage acceptable | | BUY triangle 🔺 + **purple** candle | ⭐⭐⭐ B | Half size, need extra confirmation from Trend Cloud | | BUY triangle 🔺 + **red** candle | ⭐ C (likely fake) | **Skip** — fighting market pressure | | BUY triangle 🔺 + 3 prior candles all green | ⭐⭐⭐⭐⭐ A+ | Trend clearly established — confident | > **Simple rule:** Triangle matches candle color = enter. Mismatch = skip. #### Combine with Trend Cloud **Triple confirm** = signal + matching candle color + matching Trend Cloud = highest-quality setup. ``` 🔺 BUY signal + 🟢 green candle + ☁️ green cloud → A+ entry, full size + leverage acceptable ``` *** ### 6. How to Enable / Disable Candle Coloring In the indicator's input panel: ``` General Settings → Candle Coloring • "Confirmation" → On (default) • "None" → Off ``` > **Recommendation:** Keep **Confirmation** in 99% of cases. Only turn off if running many other indicators and wanting to reduce visual noise. *** ### 7. Common Issues #### "Why are candles often purple even when I see price trending?" 3 reasons: 1. **You're using Engine B (Advanced)** — requires HTF agreement. Chart bullish but HTF still bearish/sideways → purple. 2. **Trend is weakening** — losing momentum, hasn't flipped red yet but not strong enough to be green. 3. **Deep pullback** — price testing EMA or Trend Cloud base. #### "Candle colors flip constantly, how do I trade?" You're in a **chop zone** — that's good news: the system is telling you **not to trade**. Switch to another asset or wait for the market to pick a direction. #### "Engine A and Engine B show different colors?" Correct — that's by **design**: * Engine A is faster, may already be green * Engine B is slower (requires HTF), may still be purple or red → That's why **Advanced is higher quality but fires less often**. #### "Can I customize the colors?" In the current indicator, colors are fixed to ensure **consistency** across traders (same visual language). No custom option available. *** ### 8. One-Line Cheat Sheet ``` 🟢 GREEN CANDLE = buyers → prefer LONG, no SHORT 🔴 RED CANDLE = sellers → prefer SHORT, no LONG 🟣 PURPLE = sideway → DO NOT TRADE ``` > **Rule #1:** Never trade against the candle color. That's the fastest path to blow-up. *** ### 9. ⚠️ Disclaimer Candle Coloring is a **visualization aid**, not an autonomous system. Candle color is **never** a sufficient condition to enter a trade — always combine with signals and risk management. **Trading carries a high risk of capital loss.** This indicator is distributed for **educational purposes**, with no profit guarantee. Read the full disclaimer at `MRDS_OVERVIEW_EN.md`. *** 🌐 **Vietnamese version:** `CANDLE_COLOR_GUIDE_VI.md` --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.mrd-indicators.com/feature/tradingview-indicators/mrd-signals-premium-eng/candle-coloring.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.