AlgoStrats Blog

  • By Marco Mayer
  • Posted Mar 9, 2018

Finding big market moves: BarStrength Indicator

I’d like to share an indicator I came up with that I found very useful over the years. It’s actually a very simple one but it proved itself against over and over again against much more complicated indicators that try to do the same thing. So I surely wouldn’t want to miss it.

Here’s the formula: abs(open-close)/(high-low) * 100

Bar Strength Indicator

Which gives us a value between 0 and 100 that measures the actual price change of a single price bar (absolute value of open-close) against the whole price bars range (high-low). Or in Candlestick charting language: measures the size of the candle body against the whole candle including the wicks.

Happy Trading!

Marco



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