InsideBar Plus Volumes
The indicator displays the inside bar pattern on the chart. Its distinguishing feature is the triple filtration. First, not all candles meeting usual conditions can be used as first candles here. It should be a "free" candle, meaning that its High or Low (depending on conditions) should have a free space to the left. The VSA method has a similar condition called 'new fresh ground'. In case of an uptrend, the candle's High should be free, in case of a downtrend, it is the candle's Low. Second, the indicator considers the pattern's first candle size (spread). Third, the indicator features binding to volumes.
The indicator settings allow specifying the minimum size of the first candle and its minimum "free space". You can also set the color of the arrows used to mark the pattern on the chart. The volume ratio is not specified in the settings and remains constant. The candle volume followed by the pattern is larger. The volume of the pattern's first candle goes next. The third (the smallest) volume has the pattern's inside bar. Based on the volumes, we can call this pattern "321". As a result, our pattern consists of three candles rather than two ones.
- Minimum candle size - minimum size of the pattern's first candle in points
- Free space - free space to the left of the pattern's first color High (Low), in bars
- UP - "upper" pattern arrow color
- DOWN - "lower" pattern arrow color
The screenshots display the settings and two examples of acceptable use of IB_indicator.
The binding to the chart's extreme values is to be implemented in future versions. This will allow us to assess the situation on the chart more objectively, starting from the reaction of prices to meaningful "spikes". Configuring other volumetric models will possibly be introduced as well.
A candle may be free both by High and Low. In this case, the largest of these values is taken into account. This is also reflected in the indicator code.
The indicator has been developed based on real volumes of the Chicago exchange. The screenshots were made on EURUSD futures charts, EU6.
Sometimes, for example, during a downward trend, the pattern's first candle may turn out to be an upward bar being marked by the upper label rather than the lower one. The situation may be similar during an upward trend. This drawback will be fixed in the next version.