VR Break Charts
Three Line Break chart is a chart type used in technical analysis of stock and currency markets.
The indicator's advantage is that it does not consider time. Only price change is taken into account.
High, Low and Close of the last period are used when generating the chart. Blue line means price growth, while red one means price fall.
Construction and Calculation
Close price of the past period is compared to the previous period's High and Low.
- If the current Close is above the previous period's High, the rising white line is drawn from the previous High level up to the current one.
- If the current Close is below the previous period's Low, the falling black line is drawn from the previous Low level down to the current one.
- If three white lines in a row appear on the chart, the red line appears after the current Close falls below the first blue line's Low. The red line is drawn from the last blue line's Low level up to the current Low. Red line after the three blue ones is used as a simple sell signal.
- Each new line is built with the indent to the right.
Standard technical analysis methods can be applied to Three Line Break chart: trend, support and resistance lines.
Minor fixes in the code.