The "Days Higher" indicator utilizes a color-coded scheme to indicate the number of days in the asset's price history where the closing prices were higher than the current day's price. The color spectrum ranges from red to blue, representing varying levels of historical price strength.
The color coding scheme of the indicator offers a quick and intuitive understanding of the price performance:
- Red: Represents a higher number of days in the asset's price history where the closing prices were higher than the current day's price. This suggests a weaker price trend or a potential reversal and indicates relative price weakness.
- Blue: Represents a lower number of days in the asset's price history where the closing prices were higher than the current day's price. This indicates a strong trend of higher prices and suggests relative price strength.
- Orange & Green: Correspond to different numbers of days where the closing prices were higher than the current day's price. The specific color gradations between red and blue reflect increasing or decreasing historical price strength.
The "Days Higher" indicator examines each bar in the asset's price history leading up to the selected day. It counts the number of bars where the closing prices were higher than the current day's price.
The indicator then assigns a specific color to the price chart based on the count of such days, providing a visual representation of historical price strength relative to the current price level.
The "Days Higher" indicator offers traders and investors a unique perspective on the historical price performance of an asset. By assessing the color-coded chart, market participants can quickly gauge the presence of strong or weak historical price trends.
This information can be used to identify potential support or resistance levels, assess the overall strength of a trend, or evaluate the likelihood of a price reversal. Traders may incorporate this indicator into their analysis to make more informed trading decisions based on the historical price strength indicated by the color-coded chart.
It is important to note that this tool should be used in conjunction with other technical analysis tools and indicators to validate signals and make well-rounded trading decisions.
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.