Product / Product Information / Technical Analysis
Single Bar Patterns
Single-Bar Patterns indicate those changes in a price
that occur in a single trading bar if your use a minute time
frame. The study identifies the following patterns: Gaps,
Spikes, Thrust days, Run days, Wide-Ranging days.
A gap forms when the opening price movements create a blank spot on the chart. This happens when the high of the day is below the low of the previous day, or when the low of the day is above the high of the previous day.
Gaps are especially significant when accompanied by an increase in volume.
∑ An Upper Thrust day is a day when the market is closed higher than the high of the previous day.
∑ A Lower Thrust day is a day when the close price is lower than the low of the previous day.
Run days are the days with a pronounced trend. They are identified using the following criteria:
∑ True High of the run day should be higher than the highest true high of the previous N days;
∑ True Low of the run day should be lower than the lowest true low of the following N days;
To count Wide-Ranging Days, Tradecision uses Jack Swagger's
approach. The study is calculated in the following
True Range of the current bar is divided into the number of the Average True Range of X (Wide-ranging day length) bars, and if the result is equal to or greater than the Wide-ranging day ratio, the bar is marked as a wide-ranging day.
∑ Wide-ranging day ratio defines the volatility threshold used to identify wide-ranging days.
∑ Wide-ranging day length is the number of the previous bars with regard to the current bar.
A Spike High is a day's maximum, which rises
sharp above the maximums of the previous and next days.
A Spike High is identified by the following:
∑ a high rise above the days on either side,
∑ Close near the day's Low, and
∑ a strong preceding rally.
The more extreme any of the above conditions is, the greater is the likelihood of a reversal.
A Spike Low - is a day's minimum, which is
much lower than the minimums of the previous and next days.
A Spike Low is identified by the following:
∑ Falls sharply below the days on either side,
∑ Close near the Day's High
∑ must be preceded by a strong decline.