Hello,

This indicator is designed to indicate trend and potential support/resistance levels.

It originated from my work with the wide range bodies and their translation into tick charts.

My theory is that wide range bodies appear in tick charts as consecutive bars higher or lower (3 bars with higher highs, higher lows, etc.). It's not an exactly true translation, but often it works out that way in my experience.

Taking the theory one step further, if you have 2 sets of 3 consecutive up or down bars, you normally will have a trend intact.

This indicator recognizes (bullish example) when there is three consecutive bars setting higher highs and higher lows. Then it looks for the occurrence to happen once again and sets a dotted line where the pivot was that started the move.

New lines will appear as the trend progresses and new legs appear. These lines are areas of support within the trend.

If price begins to run into the lines, then you have likely run into a range and should look for range trades as opposed to continuation trades. Once the range fails you get flat until new trend bars are established (this is beacuse the range may just expand to shake more people out).

I am posting this for feedback. Since we each have a diverse approach to trading I would be interested to see if anyone finds this analysis fitting into their style well.

Getting late, sorry if I don't make much sense here - -here you go. PS> the indicator is designed to run on tick charts, maybe on volume bars as well.

[torero]

This is an excellent assessment of the price action, waveslider! I manually draw these S/R areas but not incorporating WRB in doing so. This is an interesting approaching in seeing the S/R clearer. I'll give it a try. Thanks for your generosity!

[dovetree]

Re: 3bar trend

This sounds a little like the scalper buy or sell signals form TTM but with and niteresting twist.
Can you post the actual code rather than a ELD? I have Ts 2000i and cannnot use the ELD.

Thanks

[Soultrader]

Very interest waveslider. Dalton also referred to these areas as balance areas. Basically, if the distance between two dotted lines become shorter price is balancing out. Hence, if you are long/short you would want to look for an exit. In a healthy trend, the distance between the dotted lines should not get shorter.

Just something that might be helpful

[waveslider]

Thanks soultrader, I am not familiar with Dalton and maybe should do a little reading.
Something else that tells when price is balancing out is price catching up with time, this is the same idea as what you stated I believe. The idea is that the trend will slow down and "recharge" before it makes its next move -continuation or reversal. Either that will happen or there will be a capitulation "washout" move signaling reversal.
One thing to note is that when one of these levels is broken and price holds above or below the dotted line, it will normally come back and retest the other side of the dotted line from the other side.
So in other words, resistance becomes support - not a new concept, just a different way of visualizing it.
Here's a chart from friday's session that shows that happening.

[waveslider]

Here is the .eld code for 3bar. As a PS to that last note - I wonder if anyone has done any work with dispaced moving averages/price channels. These seem to be a good way of telling when the trend has slowed and maybe stalled out.
It's hard to see this in retrospect since you can't actually see the shift in real time, I am starting to watch it a little bit now to see if it might be useful.
I think Hurst did some work on this idea..

If you need the ELA text you can PM me. thanks

[dovetree]

Thanks for the code, I will see how it goes in 2000i. Is it a show me or indicator

[waveslider]

its an indicator that should be plotted as dots. if there are any programmers out there, please post any bugs... thanks