CCT Average True Range

CCT Ignition Candle Detector

The CCT Ignition Candle Detector indicator was developed to assist traders in identifying “ignition candles” — candles that represent potential high-volatility breakout events accompanied by strong volume and a clear directional move relative to short-term trend averages.

• Concept and Functionality

This indicator measures the relationship between the candle’s amplitude (difference between high and low) and the Average True Range (ATR).
The ratio between these two values provides insight into whether the current candle exhibits volatility that is statistically significant compared to its recent history.

Additionally, the indicator evaluates body strength, volume behavior, and proximity to the EMA8 (a short-term dynamic average often used to gauge immediate momentum).
When specific quantitative criteria are met, the indicator identifies the candle as a potential Ignition Candle, meaning it could mark the start of a new impulse move.

Ignition Criteria:
A candle is considered an Ignition Candle when all of the following conditions are satisfied:

• Amplitude ≥ 3× ATR
  

• Candle body ≥ 2.5% (difference between open and close relative to open)
  

• Volume ≥ 1.3× SMA14 (volume)
  

• Breakout of the EMA8 in the direction of the move (bullish or bearish)
  

When these factors align, the indicator marks the corresponding candle with a label and displays an orange highlight in the information panel.
This visual cue helps the trader immediately identify points of high energy or breakout potential in the chart.

Readings and Visual Elements
Yellow line: Candle amplitude (High–Low)
Red line: True Range (ATR)
White line: Moving average of ATR

• Info panel: Displays amplitude, ATR value, volume comparison, EMA8 relation, and ignition status.
  

• label on chart: Appears when an ignition candle is detected.
  

• The indicator does not generate trading signals, but provides quantitative context for decision-making.
  

Practical Usage

Traders may use this indicator to:

• Identify potential breakout zones after periods of contraction.
  

• Confirm whether a strong candle represents true momentum or a false breakout.
  

• Combine ignition readings with trend filters (such as higher timeframe EMA or price structure).
  

• Evaluate the strength of reversals or continuation moves.
  

A common practical approach is to enter in the direction of the ignition candle once it closes,
place a protective stop below or above the candle’s body, and target 1.5–2× the initial risk.
This approach leverages volatility expansion in its early stage.

Recommended Settings:

• ATR Length: 14 (default)
  

• EMA Period: 8
  

• Volume MA: 14
  

• Timeframes: Works well in intraday and daily charts.
  

Notes:

This tool is designed as a volatility and momentum analyzer, not a buy/sell system.
It should be used together with broader market context, price structure, and volume confirmation.
It aims to standardize the interpretation of large candles, allowing the trader to objectively identify when volatility expansion is statistically relevant.

Credits:
Developed by Central CryptoTraders © 2025