Range Analysis

Range Analysis

The Range Analysis indicator detects narrow range bars, inside bars, wide range bars and outside bars. The bar types follow the terminology presented by Toby Crabel in his book “Day Trading With Short Term Price Patterns and Opening Range Breakout”.

Indicator Description

Both Wide and Narrow Range patterns that can be identified with the Range Analysis default settings:

  • Narrow Range Inside Bar (IB4): An inside bar with a smaller range than the prior 3 bars.
  • Double Inside Bar (DI5): An inside bar that is preceded by an IB4 bar.
  • Narrow Range Bar (NR7): A bar with a smaller range than the prior 6 bars.
  • Narrow Range Inside Bar (IB7): An inside bar with a smaller range than the prior 6 bars.
  • The 2 Bar Narrow Range (2NR): The narrowest 2 bar range relative to any two bar range within the previous 20 bars.
  • The 3 Bar Narrow Range (3NR): The narrowest 3 bar range relative to any three bar range within the previous 20 bars.
  • Wide Spread Outside Bar (OB4): An outside bar with a larger range than the prior 3 bars
  • Wide Spread Double Outside Bar (DO5): An outside bar that is preceded by an OB4 bar.
  • Wide Spread Bar (WS7): A bar with a larger range than the prior 6 bars
  • Wide range outside bar (OB7): An outside bar with a larger range than the prior 6 bars
  • The 2 Bar Wide Spread (2WS): The widest 2 bar range relative to any two bar range within the previous 20 bars.
  • The 3 Bar Wide Spread (3WS): The widest 3 bar range relative to any three bar range within the previous 20 bars.

The patterns are labeled with text boxes and paintbars and may be displayed individually or all at once (default).

Lookback for inside / outside bars:

Simple inside bars: When the parameter “lookback inside bars” is set to 2, the indicator will detect all inside and double inside bars without taking into account their range size relative to preceding bars.

Simple outside bars: When the parameter “Lookback outside bars” is set to 2, the indicator will detect all outside bars.

The indicator comes with sound files. The sounds will work with COBC=true and COBC= false. With COBC= false, wide range and outside bars are detected intra-bar. Narrow range and inside bars are detected once the bar is 90% complete.

Other Library Indicators

Narrow Range patterns that form in a higher timeframe, often indicate a consolidation / contraction scenario. This scenario is often useful when qualifying potential breakouts and was discussed in our Indicator Spotlight on the Opening Range. The approach may also be used to confirm Squeeze momentum setups. More information on the Squeeze indicator was discussed in our Indicator Spotlight. Other momentum and breakout setups were discussed in our posts on the TDI indicator and the Donchian Channel strategy. Finally, you may consider validating Narrow Range setups with volume analysis, specifically using our Relative Volume indicator.

The indicator is available for NinjaTrader 8.