# HTF Candle Overlay Also known as: higher-timeframe candle overlay, HTF candles, HTF candle projection, multi-timeframe candles. A Meta & Composition concept (Multi-timeframe) in the LuxAlgo Library, with 1 indicator implementation. ## What is a Higher-timeframe Candle Overlay? A higher-timeframe (HTF) candle overlay draws the candles of a larger timeframe on the chart you execute from, including the one still forming. A trader on the 5-minute chart sees the day's candle being built bar by bar, its open, high, low and close updating live, alongside the last few completed daily candles. The point is to read the higher-timeframe candle while acting on the lower one, without switching charts. Two display styles dominate. Projections draw the HTF candles in the empty space right of the last bar, at their true prices, so the developing candle sits beside current price like a second, slower chart. Background overlays draw each HTF candle behind the lower-timeframe bars that built it, a shaded body with wick lines spanning the period, showing which bars made the high, the low and the close. Both usually extend the HTF open, high and low as lines, the prices most candle-based models trade against. Several methods are, at bottom, readings of one higher-timeframe candle. [Power of Three](https://www.luxalgo.com/library/concept/accumulation-manipulation-distribution/) asks whether the day has made its false move beyond the open yet; [Candle Range Theory](https://www.luxalgo.com/library/concept/candle-range-theory/) asks whether the current candle has swept the previous one's high or low and closed back inside; [The Strat](https://www.luxalgo.com/library/concept/the-strat/) asks whether price is above or below each timeframe's open. Each question concerns an unfinished candle, and an overlay shows that candle as it forms. It is a display, not a signal: the developing candle changes until its period closes, and a wick that looks like rejection at midday can be a full body by the close. ## How it's calculated The developing HTF candle is an aggregation of the lower-timeframe bars inside the current HTF period. ``` O_P = O_s H_P = max(H_j), j = s to t L_P = min(L_j), j = s to t C_P = C_t When period P ends, its values freeze and a new candle starts at the next bar P: the current higher-timeframe period (for example the day or the 4-hour block) s: index of the first lower-timeframe bar inside period P t: index of the latest lower-timeframe bar j: bar index running from s to t O_s, H_j, L_j, C_t: open, high, low and close of lower-timeframe bars O_P, H_P, L_P, C_P: open, high, low and close of the higher-timeframe candle ``` Period boundaries follow the instrument's session and timezone settings, so a daily candle on a futures chart and on a crypto chart start at different clock times. On futures, the official daily close is often a settlement price, which can differ from the last intraday trade an aggregation uses. ## How traders use it - As a live bias read: many traders take lower-timeframe setups only in the direction of the developing daily or weekly candle, and only while price holds on that side of its open. - For candle-anatomy models: Power of Three and CRT traders track the developing candle's open, its first excursion and the previous candle's extremes in real time, exactly what an overlay keeps on screen. - As self-updating levels: the HTF open and the previous and developing highs and lows double as [period opens](https://www.luxalgo.com/library/concept/period-opens/) and [prior period levels](https://www.luxalgo.com/library/concept/prior-period-levels/) without manual drawing. - For internals: some overlays add what happened inside the candle, such as the share of bullish versus bearish lower-timeframe bars, an intraperiod volume profile with its point of control, or a running volume delta. - In LuxAlgo builds: HTF Candle Projections draws recent and live HTF candles right of price, tracing each wick to the bar that printed it; HTF Candle Dynamics adds live OHLC levels and an intraperiod volume profile; HTF PO3 projects Power of Three candles with a running delta. ## HTF candle overlay vs related composition tools - **Top-down Analysis** (https://www.luxalgo.com/library/concept/top-down-analysis/): Top-down analysis is the process: read higher timeframes first, execute lower. The overlay is a display that keeps one higher timeframe in view during execution; it adds no rules of its own. - **Prior Period Levels** (https://www.luxalgo.com/library/concept/prior-period-levels/): Prior period levels are closed periods' highs, lows and closes drawn as lines. An overlay shows those plus the developing candle, so its open, range and close are read live rather than once the period ends. - **Accumulation-manipulation-distribution** (https://www.luxalgo.com/library/concept/accumulation-manipulation-distribution/): PO3 is a reading of the HTF candle (open, false move, true move); the overlay is the display that lets you make that reading while the candle forms rather than after it closes. ## FAQ ### How do I see higher-timeframe candles on a lower-timeframe chart? Add an overlay indicator or a built-in multi-timeframe candle display, then choose the timeframe, the number of candles, and whether to draw them beside price or behind the bars that formed them. Keep the chart timeframe below the overlay's and the session settings aligned, or the candle boundaries will not line up. ### Does a higher-timeframe candle overlay repaint? Completed candles do not change. The developing candle does, by definition, until its period closes, so any read of its wicks or body is provisional. Overlays built from lower-timeframe data can also differ slightly from the platform's own higher-timeframe bars where sessions or settlement prices differ. ### Which higher timeframe should I overlay? The one your bias comes from, typically a step or two above the execution chart: the daily candle on 5- or 15-minute charts, the 1-hour or 4-hour candle on 1-minute charts, the weekly on hourly charts. Several can be overlaid at once, but the chart crowds quickly. ## Implementations in the Library - HTF Candle Dynamics (LuxAlgo): https://www.luxalgo.com/library/indicator/htf-candle-dynamics/ ## Related concepts - Top-down Analysis: https://www.luxalgo.com/library/concept/top-down-analysis/ - MTF Alignment & Confluence Scoring: https://www.luxalgo.com/library/concept/mtf-alignment-and-confluence-scoring/ - HTF-level Proximity Filters: https://www.luxalgo.com/library/concept/htf-level-proximity-filters/ --- Source: https://www.luxalgo.com/library/concept/htf-candle-overlay/ (LuxAlgo Library, the encyclopedia of trading & technical analysis). Free to use with attribution: https://www.luxalgo.com/library/license/