Wide ranging bars

Learn what wide ranging bars are, why they are important and how to recognize the impact wide ranging bars have on candlestick charts.

What are wide ranging bars?

  • Wide ranging, or long, bars occur when there is a bar that is at least 2-3 times longer than normal bars on the chart.
  • Often are the result of a major news announcement although this is not always the case.

Why are wide ranging bars important?

  • Wide ranging bars signal strong momentum in the direction of the bar.
  • May signal that there is little buying interest in a bar down, and little selling interest in a bar up.
  • Can signal that possible support and resistance will not hold

So how do I use wide range bars?

If there is a wide ranging bar, generally that is a signal to stay out of the market. Our technical reports generally look for short term reversal points. If there is a wide ranging bar going into our entry, it may be a signal that the pattern being traded will not hold. In this case, we may simply cancel the trade.

Wide ranging bar

 

Example 1: Bearish wide-range bar formation on a USD/CHF, 30 minute chart

Wide Ranging Bars Chart 1

Example 2: Bullish wide-range bar formation on a EUR/CHF, 30 minute chart

Wide Ranging Bars Chart 2

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