Outside-Bar Signals with a Channel That Ends on a Close Break

Summary

This indicator identifies outside bars whose range meets a minimum height. A bearish signal occurs when the bar extends beyond the prior bar’s high and low and closes down; a bullish signal uses the same range expansion but closes up. It marks signals with arrows, offset from the bar by twice the 14-period average true range.

When a qualifying outside bar appears, the indicator plots its high and low as channel boundaries. The channel remains until a bar closes above the top or below the bottom, at which point both boundaries are cleared. The document provides code but no chart examples, parameter guidance beyond the stated ATR offset, or performance evidence. It also does not define how the minimum signal height should be selected or establish that channel breaks predict profitable trades.

Key ideas

• A qualifying outside bar must exceed a minimum range and extend beyond both extremes of the previous bar.
• The bar’s closing direction determines whether the signal is marked bullish or bearish.
• Signal arrows are offset from the bar using twice the 14-period average true range.
• The outside bar’s high and low form a channel that is cleared after a close beyond either boundary.
• The document gives implementation logic but no validation or performance results.

Tags

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