Trend Confirmation Index from Candle Close Position
Summary
The Trend Confirmation Index (TCI) estimates trend strength by averaging the close’s position within each candle over a configurable lookback period. For each candle, close position is scaled from the low to the high, with values nearer the high indicating a stronger closing location within that candle. TCI applies a selected moving-average method to these close-position values. The indicator also offers overbought and oversold levels and an option to display the underlying close-position series.
The method relies on the assumption that where a candle closes within its range conveys information about trend strength and whether that strength is changing. The description provides the calculation concept and configurable inputs, but no parameter guidance, trading rules, empirical validation, or performance results. A zero-range candle would also make the stated close-position formula undefined, and the note does not explain how that case is handled. TCI is therefore presented as an analytical indicator rather than a standalone trading strategy.
Key ideas
- TCI averages the close’s position within each candle over a selected period.
- The close-position measure scales the close relative to the candle’s low and high.
- Users can configure the averaging method, period, threshold levels, and display of the underlying series.
- The indicator assumes candle close location contains information about trend strength, but the note provides no validation or trading rules.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.