Price Sandwich

How it works

The Price Sandwich indicator analyzes three consecutive candles to identify a unique pattern where the middle candle is completely contained within the price range of the preceding and following candles. It checks specific conditions by comparing the high and low prices of these three candles to determine if they meet the sandwich criteria.

When the pattern is detected, the indicator highlights the middle candle using a user-selected color, drawing attention to potential trend reversal opportunities. The script uses Pine Script version 5 and allows traders to customize the highlight color, making it a flexible tool for identifying unique price action formations.

Why it may be useful

This indicator provides traders with an early warning signal for potential trend reversals, offering an additional layer of confluence when analyzing market movements. By identifying unique price action patterns, traders can gain insights into potential changes in market momentum and direction.

The Price Sandwich pattern helps traders recognize moments when price movement becomes compressed or constrained, which could indicate a potential shift in market sentiment. It serves as a complementary tool to other technical analysis methods, helping traders make more informed decisions about possible entry or exit points.

When to explore it

The indicator works best on very short-term timeframes, particularly 1-minute, 2-minute, or second charts, where rapid price movements are more pronounced. Traders should use this signal in conjunction with other technical indicators and analysis methods to increase its reliability and effectiveness.

Ideal applications include identifying potential trend reversals, confirming support and resistance levels, and finding additional confluence with other trading strategies. The indicator is particularly useful for traders who focus on short-term price action and quick market movements, such as scalpers and day traders.

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