Intraday Intensity Index with Bollinger Band Confirmation

Summary

The document explains the Intraday Intensity Index (III), a volume-based indicator intended to estimate buying or selling pressure from a security's close within its daily high-low range. It describes an underlying calculation that weights the close's position in that range by volume, then sums the result over a 21-period window. Positive and negative cumulative readings are displayed in different colors. The indicator is attributed to Dave Bostian and presented as a ProRealTime adaptation.

The suggested use is as confirmation alongside Bollinger Bands: consider a positive reading when price reaches the lower band as a potential entry condition, and a negative reading at the upper band as a potential exit condition. This is a heuristic, not tested evidence of an edge. The document supplies no backtest, risk controls, market-specific guidance, or rules for handling conflicting signals, so the setup requires independent validation.

Key ideas

• The Intraday Intensity Index combines volume with the closing price's position in the daily high-low range.
• The example accumulates the indicator over a 21-period window and distinguishes positive from negative readings.
• The proposed setup uses positive readings at the lower Bollinger Band as a possible entry confirmation.
• Negative readings at the upper Bollinger Band are suggested as a possible exit confirmation.
• The document provides no backtest or evidence that the heuristic is profitable.

Tags

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