overbought & oversold

Overbought & Oversold

📘 OB/OS Candle Color – Confluence + Volume (v6)

This indicator colors candles based on the confluence of overbought (green) and oversold (red) conditions, combining technical signals from price and volume to provide reliable, uncluttered visual readings.

🔹 What It Measures

RSI → classic strength/weakness extremes.

Stochastic %K → short-term oscillations.

Bollinger %B + Price Z-Score → statistical deviations from the mean.

MFI, CMF, Volume Z-Score, OBV Z-Score → intensity and direction of capital flow.

🔹 How It Works

Each metric produces an overbought or oversold signal.

The indicator counts how many conditions are simultaneously true.

If the count exceeds the user-defined threshold (Min Conditions), the candle is colored:

Green → Overbought

Red → Oversold

An optional EMA-based trend filter avoids counter-trend signals.

🔹 Why It’s Useful

A single RSI or isolated volume spike can be misleading.
This tool filters market noise by combining eight independent signals, giving a much stronger confirmation of market extremes.

🔹 Recommended Timeframes

Optimized for 15m, 30m, 1h, 4h, and 1D charts.
Adjust Min Conditions depending on timeframe:

15–30m → 4–5

1h → 3–4

4h–1D → 3

🔹 Usage Tips

In trend-following strategies → keep the EMA filter ON.

In mean-reversion setups → turn the filter OFF to catch short-term reversals.

Give more weight to signals with extreme volume spikes and price beyond Bollinger Bands.

This is not an automatic trading system, but a visual trigger to help identify overextended zones and improve entry/exit timing.