Impulse Candle Indicator: Identify Momentum Bars with ATR and Volume

Related: Candle Timer Countdown for MetaTrader 5 - another powerful indicator for MetaTrader 5 traders.

An impulse candle is a bar that moves significantly in one direction and closes near its extreme. These bars are fundamental for breakout and momentum trading strategies, often identified visually. This indicator automates this process, marking bullish impulses with a green arrow and bearish impulses with a red arrow.

Also recommended: Heikin Ashi Candlesticks - similar indicator with strong performance on MetaTrader 5.

A bar is identified as an impulse candle if all the following conditions are met:

1. The body of the candle (close minus open) is at least equal to the Average True Range (ATR) multiplied by the `InpImpulseAtrMult` input. The ATR is calculated over the `InpAtrPeriod` bars of the chart's timeframe.

2. The candle body represents at least `InpMinBodyRatio` of the total bar range (high minus low), ensuring that candles with long wicks are excluded.

3. The closing price is located in the upper portion of the bar for a bullish impulse or the lower portion for a bearish impulse. With `InpMinCloseLoc` set to 0.70, this means the close must be within the top 30 percent or the bottom 30 percent of the bar's range.

4. If the `InpUseVolume` option is enabled, the tick volume of the bar must be at least `InpVolumeMult` times the average tick volume of the preceding `InpVolumePeriod` bars.

All calculations are performed on the bar itself, ensuring that once a bar is marked as an impulse, it remains marked. The current, forming bar is evaluated in real-time, and its indicator arrow may appear or disappear until the bar closes. For use in an Expert Advisor, it is recommended to analyze the previous closed bar.

Inputs:

InpAtrPeriod: The period for ATR calculation (default: 14).
InpImpulseAtrMult: The multiplier for ATR to determine the minimum body size (default: 1.20).
InpMinBodyRatio: The minimum ratio of the body size to the total bar range (default: 0.65).
InpMinCloseLoc: The threshold for the closing price's location within the bar's range (default: 0.70, meaning the top or bottom 30 percent).
InpUseVolume: A boolean value to enable or disable volume confirmation (default: true).
InpVolumePeriod: The period for calculating the average volume (default: 20).
InpVolumeMult: The multiplier for average volume to confirm impulse bars (default: 1.30).

Expert Advisor Integration:
Buffer 0 provides the signal for bullish impulses, and Buffer 1 for bearish impulses. A non-zero value indicates a signal, with the value representing the price level of the arrow. These buffers can be accessed using `iCustom` and `CopyBuffer` functions, typically with a shift of 1 to read the last closed bar.

This indicator is designed for use on any symbol and timeframe. The default settings are optimized for lower timeframes (M1 to M15) on volatile instruments like BTCUSD, XAUUSD, and index CFDs, where impulse bars are more common. For higher timeframes (H1 and above), the ATR multiplier (`InpImpulseAtrMult`) may be reduced to 1.0.

Important Note:
The indicator solely identifies impulse bars. It does not provide trading signals or advice on whether to trade these impulses. Trading decisions should be based on the specific symbol, associated costs, and your overall trading strategy.

You may also like: HTF Candles (ICT Power of Three): Higher Timeframe Candles Displayed - excellent alternative for indicator users on MetaTrader 5.

#property copyright "RobotFX"
#property version     "1.00"
#property description "This code is educational. Feel free to use, modify and upgrade as you wish. Visit ROBOTFX.ORG for professional trading tools"
#property indicator_chart_window
#property indicator_buffers 2
#property indicator_plots   2
#property indicator_label1  "Bull impulse"
#property indicator_type1   DRAW_ARROW
#property indicator_color1  clrLime
#property indicator_width1  2

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• This tool is provided for educational and testing purposes only.
• Past performance does not guarantee future results.
• Trading involves substantial risk of loss. Use on a demo account first.
• Results may vary depending on market conditions, broker, and settings.
• We recommend thorough backtesting and forward testing before using with real funds.