Using Outside Bars to Mark Movement and Place Visual Stops

Summary

This document describes a chart indicator that highlights outside bars with different colors and plots a corresponding stop level. It presents the bars as a visual aid for identifying price movement and setting stops, with an adjustable point offset from the bar’s high or low. The stop line can also be disabled, and the source description says the candle colors can be made configurable by changing the indicator code.

The supplied indicator logic checks whether the close reaches the bar’s low or high, then colors the candle and sets the stop beyond the opposite extreme by the chosen offset. The author says they use it alongside other indicators, but provides no chart examples, performance results, entry rules, or systematic evaluation. The description is therefore a practical charting aid rather than evidence of a profitable strategy. Its usefulness depends on the instrument, timeframe, and trader’s broader rules for interpreting outside bars and managing risk.

Key ideas

• The indicator colors outside bars to make price movement easier to see.
• It plots a stop level beyond the bar’s high or low using an adjustable offset.
• The stop line can be disabled, and candle coloring can be altered in the code.
• The author describes using the tool with other indicators but provides no performance evidence.

Tags

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