Classifying Candle Strength by Close Location and Prior-Bar Range

Summary

The document proposes reading each bar through two dimensions: where its close falls within its own high-low range, and how that close relates to the previous bar’s range. Close location is divided into upper, middle, or lower thirds, while the close relative to the open distinguishes stronger and weaker bars. Combining these categories yields 18 possible relationships, ordered from bullish to bearish. The accompanying function applies different multipliers to the current close according to the prior-range comparison and the bar’s close location and direction.

This is presented as an indicator concept for encoding bar-by-bar buying and selling pressure, rather than as a complete trading system. The text provides no market sample, backtest, or performance evidence, and it does not define thresholds for turning the classifications into entries or exits. The implementation also stores scaled close values rather than a plainly stated signed score, so users would need to confirm how those outputs are intended to be interpreted before using them analytically.

Key ideas

• Bar strength is classified by close location within the current bar and close direction relative to the open.
• The close is also compared with the previous bar’s high and low to add context across bars.
• Combining the categories creates 18 ordered bullish-to-bearish relationships.
• The supplied function encodes categories through scaled close values, but the document gives no validation or trading rules.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.