Range Edge Candle Grader
Price tagged the edge of your range and printed something. Paste the last 3 bars and the range. The grader names the pattern, checks that it sits on the edge, scores the rejection, and hands back a verdict: fade it, wait 1 bar, or stand aside. Pattern rules follow Nison's Japanese Candlestick Charting Techniques (1991): a hammer needs a lower shadow at least 2x its body, an engulfing bar has to swallow the prior body, a piercing line has to close past the prior body's midpoint. Stops go beyond the pattern extreme. Targets sit at the midpoint and the far edge.
One bar per line as open,high,low,close. 1 to 3 bars. Spaces or tabs work too.
Stop buffer = 0.25 ATR. Blank uses 5% of the range.
No grade yet
Enter the range and up to 3 bars, then hit Grade. Or load an example to see what a passing setup looks like.
How it grades. Grade = 35 points pattern strength + 25 edge location + 20 close strength + 20 room to the midpoint. 70 or more is a fade. 45 to 69 means wait for 1 confirming close. Under 45, stand aside. Hard no-trades: the last bar closed through the edge, or the pattern sits 25% of the range or more inside it. Entry is the close of the signal bar. The stop goes 0.25 ATR beyond the pattern extreme, or 5% of the range when ATR is blank. T1 is the midpoint, T2 the far edge.
Pattern rules, written for the range low. The high is the mirror image. Hammer: lower shadow at least 2x the body, upper shadow under 15% of the bar's range, body in the top third. Engulfing: the second body covers the first body end to end. Piercing line: opens at or under the prior close and closes above the prior body's midpoint. Nison wants the open below the prior low, which is relaxed here because intraday bars rarely gap. Tweezer: the 2 lows land within 10% of the average bar range of each other, red bar then green bar. Harami: the second body inside the first. It needs the next bar to close above the harami high before it counts. Morning star: a big red body, a body under 30% of it sitting at or below the first close, then a green close above the first body's midpoint. Inside-bar reversal: bar 2 inside bar 1, bar 3 closes above bar 2's high. Doji: body under 5% of the bar's range, which is indecision, so it waits. Keyboard: Enter grades, 1 2 3 load the examples.
Educational tool only, not financial advice. A textbook candle at a textbook edge still fails a third of the time or more. Size for the stop, not for the grade.
Built by Jason Parker, founder of Trading Ranges.
Built by Jason Parker, founder of Trading Ranges.