Volatility-Driven Candle

This indicator identifies and highlights "volatility-driven candles" on a price chart, based on their body size relative to market volatility. It calculates the Average True Range (ATR) over a 14-period window to measure volatility. A candle is considered "volatility-driven" if its body (the difference between the close and open prices) exceeds a user-defined threshold, which is specified as a multiple of the ATR.

The script distinguishes between bullish and bearish volatility-driven candles:

Bullish volatility-driven candles (where the close is greater than the open) are marked with a blue label.

Bearish volatility-driven candles (where the close is less than the open) are marked with an orange label.

Additionally, the background color of the chart is shaded:

Blue for bullish volatility-driven candles.

Orange for bearish volatility-driven candles.

This script helps traders easily spot significant price movements relative to volatility, highlighting potential reversal points based on candle body size.