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2001issue C031-7

Numeric candlestick encoding with local size bands

The archive workflow replaces a named candle shape with a three-part local-size score. Each bar is split into a body, an upper shadow, and a lower shadow, then labeled with local size-thresholds so the parts can be added, averaged, and written as a testable rule.

  • Each bar is split into a body, an upper shadow, and a lower shadow computed from open, high, low, and close.
  • Separate size-thresholds on those three series label each part small, medium, or large.
  • Direction and the three size labels add into one candle-score, which a moving average can smooth into a continuous series.
  • The same scoring procedure is shown on daily and intraday charts, with signed and weighted revisions.
Entries in this reading3 entries
Current trackBollinger Bands84 readingsCandlestick patterns100 readingsMoving average449 readings

Replace a named shape with three measured parts

Each bar is split into a body, an upper shadow, and a lower shadow computed from open, high, low, and close. The body is the absolute distance between open and close. The upper shadow is the distance from the top of the body to the high. The lower shadow is the distance from the bottom of the body to the low.

The archive is not keeping the bar under a pattern name. It is turning the same open, high, low, and close structure into three parts that can be scored.

Band each series with local size-thresholds

Separate band thresholds are built on the body series, the upper-shadow series, and the lower-shadow series. Each size-threshold is the band boundary that separates small, medium, and large parts of a candle. Those bands are local high and low size thresholds built from a lookback window and a deviation multiple.

A default construction uses a 55-observation lookback and a 0.5 deviation multiple, and both values are left as adjustable inputs. Body and shadow sizes are labeled small, medium, or large according to whether they sit below the lower band, between the bands, or above the upper band.

Add the parts into one candle-score

Direction and the three size labels are added together into one integer score per bar. That candle-score is the single integer formed by adding a direction term to body-size and shadow-size terms.

A weighted revision scales the body, upper-shadow, and lower-shadow pieces by separate coefficients before they are added.

Intel candle-strength index, spring 2000

The lower pane compresses each Intel candle into one strength score that swings from the mid-teens to near 100 through the March rally and the April–May chop. Weekly readings were taken from the plotted Index of Candle Strength line on the TradingSolutions screenshot; the article text has no printed table of these values.
The lower pane compresses each Intel candle into one strength score that swings from the mid-teens to near 100 through the March rally and the April–May chop. Weekly readings were taken from the plotted Index of Candle Strength line on the TradingSolutions screenshot; the article text has no printed table of these values.Intel Cp · Daily · 2000-02-25T00:00:00.000Z to 2000-05-26T00:00:00.000Z

Y values are approximate to the nearest few index points on a 10–130 scale. The pane is labeled Index of Candle Strength with arguments High, Low, Open, Close, 2. Dates follow the printed weekly grid; a few turning points between grid lines were added so the swings stay faithful to the curve.

Average the score for comparison and crossings

A moving average is applied to the per-bar candle-score so one-bar codes become a continuous series for comparison and crossings. One indicator construction plots that score beside a 9-bar average of the same score. Another construction applies a moving average three times in succession to the score to form a smoother strength series.

A signed variant averages the score over 20 bars and treats a drop through -25 and a rise through 25 as opposite extreme readings.

Keep the same scoring on more than one chart scale

The same scoring procedure is shown on both daily and intraday charts.

Editorial interpretation: chart scale remains part of the input. The archive shows one scoring procedure on more than one scale rather than a separate construction for each.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
16 of 45 in the Bollinger Bands track
20011-5 pp.Next on Bollinger BandsRanked candlestick sentiment to band-cross entriesCandleCode attaches a numeric rank to each candlestick so strongly bearish structure scores lowest and strongly bullish structure scores highest.
All readings on this track · 45 readings
  1. 1992Constructing volatility-scaled bands with relative strength index confirmation
  2. 1994Implied volatility as a band-defined regime filter for index options
  3. 1995Constructing projection bands from least-squares slopes
  4. 1995Constructing regression projection bands and range oscillators
  5. 1996Constructing Bollinger bands, percent-b, and stochastics
  6. 1996Constructing mechanical rules from Bollinger Bands and stochastics
  7. 1996Constructing a standard-error envelope around a linear regression
  8. 1996Dual-horizon ratio envelopes and regression error channels
  9. 1997Rational group structure with a trend screen, RSI, and bands
  10. 1997Asymmetric volatility band construction
  11. 1998Constructing three-state filters from Bollinger band envelopes
  12. 1999Combination filters with Bollinger Bands and the relative strength index
  13. 1999Constructing stochastic timed exits and band-RSI reversals
  14. 1999Evaluating Bollinger Bands against fixed-width and range-based envelopes
  15. 2000Constructing a Bollinger Band target as a forward price
  16. 2001Numeric candlestick encoding with local size bands
  17. 2001Ranked candlestick sentiment to band-cross entries
  18. 2002Combining Bollinger Bands, RSI, and a stop-loss
  19. 2002Bollinger Bands remain filters, not forecasts
  20. 2002Constructing a stochastic RSI with Bollinger bands
  21. 2002Constructing a StochRSI and Bollinger mechanical system
  22. 2003Constructing volatility-scaled Bollinger envelopes
  23. 2003Why tick breadth fails as a market personality
  24. 2005Constructing Bollinger bands versus fixed trading bands
  25. 2006Squared versus absolute deviation in envelope construction
  26. 2006Confirming yen crossovers with implied volatility and bands
  27. 2006A daily candle reversal is a hypothesis until shorter sessions fail at the same zone
  28. 2008Rebuild the Relative Strength Index as price-scale bands
  29. 2008Reading Relative Strength Index extremes on one price axis with Bollinger Bands and moving averages
  30. 2011Three-filter confirmation for short-swing futures
  31. 2011Constructing an inverse Fisher stochastic with bands and averages
  32. 2012Constructing a Bollinger Band indicator suite
  33. 2012Stacking price extremes, crossovers, bands, and MACD
  34. 2012Adaptive Bollinger band impulse, trend, and momentum filters
  35. 2013Rescaling stochastic, percent-B, and wave-count parameters
  36. 2014Industry-group quartile pivots as a Bollinger Bands case study
  37. 2014Bollinger Bands as adaptive price envelopes: a 2014 classroom case
  38. 2016Trend-channel entry rules from stacked moving averages
  39. 2016A permission stack for Bollinger, RSI, and the 50-period average
  40. 2017Constructing weighted Bollinger bands and volume averages
  41. 2017Four swing-entry rules that share a timed exit
  42. 2017Two-wave monthly cycles as a regime filter
  43. 2019Constructing exponential-deviation-bands from a midline-average
  44. 2020Critiquing exponential variants of Bollinger Bands
  45. 2020Constructing selectable volatility and moving-average bands
By fieldIndicators and filters682 readingsBy year200176 readings
All 84 readings tagged Bollinger Bands
Also on Bollinger Bands5 readings
2001Ranked candlestick sentiment to band-cross entries2001Turning one candle into a ranked numeric object2001Encoding candle structure as a numeric filter2006A daily candle reversal is a hypothesis until shorter sessions fail at the same zone1992Constructing volatility-scaled bands with relative strength index confirmation