Range/Previous Session

Description:

This indicator compares the price range of the current session with that of the previous session. It provides insights into the extent of price movement within a single trading day relative to the previous day's range. A wider range compared to the previous session may indicate increased volatility or momentum, while a narrower range could suggest a consolidation or indecision in the market. Traders often use this indicator to gauge the intraday market sentiment and potential trading opportunities based on breakout or reversal patterns. This is best if used within scripting in features such as the Market Scanner or Strategy Tester.

Input Parameters:

n/a

Use Case:

Volatility Assessment: Traders use this indicator to assess the volatility in the market by comparing the range of price movement in the current session with that of the previous session. A wider range indicates higher volatility, which could present opportunities for short-term trading strategies such as scalping or day trading. Conversely, a narrower range may suggest decreased volatility, potentially signaling a period of consolidation or indecision among market participants.
Breakout Trading: Traders often look for breakout opportunities using the "range/previous session" indicator. If the current session's range exceeds that of the previous session, it could indicate a breakout from a consolidation phase. Traders may interpret this as a signal to enter a trade in the direction of the breakout, anticipating a continuation of the trend or a new trend formation.
Reversal Signals: Significant deviations in the range/previous session indicator may also serve as potential reversal signals. For example, if the current session's range is significantly wider than the previous session's range after a prolonged uptrend, it could signal exhaustion among buyers and potential reversal in the trend. Similarly, a narrow range following a strong downtrend might indicate diminishing selling pressure and a possible reversal to the upside. Traders use these signals in conjunction with other technical indicators to confirm potential reversal points and adjust their trading strategies accordingly.

This feature can be used in: