Congestion Identifier Counts Recent Closes Near the Current Price
Summary
The Congestion Identifier (CI) measures how many bars in a chosen lookback period closed within a price corridor around the current bar’s close. The corridor is set by adding and subtracting a configurable point distance, Delta. Its output is the count of closes inside that range, compared with a user-defined threshold called Level.
The indicator marks a move above the threshold as an “Out” signal and a move back below it as an “In” signal, using the prior and current CI readings. The document describes the indicator’s three settings—period, corridor width, and threshold—but gives no performance evidence, market examples, or guidance for selecting values. Its signal logic therefore describes a way to track price clustering near the current close, not a tested entry or exit strategy; the usefulness of any threshold would need to be assessed for the instrument and timeframe in question.
Key ideas
- CI counts closes within a configurable distance of the current bar’s close over a selected period.
- Delta determines the corridor width around the current close.
- Level sets the count threshold used to identify changes in congestion.
- The indicator marks crossings above and below the threshold, but provides no evidence of trading performance.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.