Intrabar Efficiency Ratio Measures Directional Travel Within Each Bar
Summary
The Intrabar Efficiency Ratio (IER) compares a chart bar’s close-to-close change with the summed absolute close changes of its lower-timeframe bars. A larger absolute ratio indicates that intrabar movement traveled more directly in the direction of the net change; a smaller ratio indicates more back-and-forth movement. The indicator optionally weights the ratio by the percentage rank of the chart-bar change’s magnitude over a chosen lookback.
Users can select a lower timeframe according to either chart-bar coverage or an approximate intrabar count, then view the IER and its moving averages as a line, candles, or circles. Several moving-average types are available, and the script reports intrabar coverage statistics. More intrabars improve calculation precision but reduce the historical chart bars that can be covered. The source describes the calculation and display options, but presents no performance tests or evidence that IER predicts returns; it is a descriptive indicator whose interpretation requires separate research.
Key ideas
- IER divides the net chart-bar close change by the sum of absolute lower-timeframe close changes.
- Values closer to zero reflect more intrabar movement relative to the net change.
- Optional rank weighting scales the ratio according to the relative size of the chart-bar change.
- Lower-timeframe selection trades historical chart coverage against intrabar precision.
- The indicator supports multiple moving-average types and three display modes.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.