Bounce Strength Indicator for Range Support and Resistance
Summary
The Bounce Strength Indicator estimates buying or selling pressure from price movement within a trading range. It measures upward bounce strength using the close’s position above the range low, scaled by the range ceiling and spread; downward strength uses the close’s distance below the high, scaled by the high’s relation to the range floor and spread. The display separates upward and downward readings into positive and negative histograms, with a middle line showing their average difference.
The idea draws on Wyckoff analysis: a strong move away from support may signal renewed buying, while a strong retreat from resistance may signal selling. The author presents the indicator as a possible leading clue to a range breakout, but explicitly limits its intended use to ranging markets. The document gives no validation results or parameters for identifying range boundaries, so signals require context and independent testing.
Key ideas
- The indicator estimates upward and downward bounce strength within a defined price range.
- Its positive and negative histograms display pressure away from the range low and high.
- A strong rise from support may precede an upside range breakout.
- The method is intended only for range conditions and is not accompanied by validation results.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.