Measuring Price Gaps Between Consecutive Bars

Summary

This indicator measures the price gap between a bar’s opening price and the previous bar’s high or low, then displays the gap size as a histogram. It offers a compact way to inspect discontinuities between consecutive bars and compare their sizes over time.

The description says the measure is most effective for instruments that do not trade continuously, such as stocks, where trading pauses can leave prices apart from the prior session’s range. It provides no formula details beyond the gap definition, parameter guidance, examples, or performance evidence. The usefulness of the display therefore depends on the instrument and chart data; on continuously traded markets, gaps may be less common or less informative. The document describes a visualization tool, not a complete entry or exit strategy.

Key ideas

• The indicator compares the current bar’s open with the previous bar’s high or low.
• It displays the resulting gap size as a histogram.
• The description identifies stocks and other non-continuous markets as its most suitable use.
• No trading rules or performance results are provided.

Tags

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