A bar whose range is far larger than recent bars, marking a burst of volatility that often defines a level worth watching.
A useful definition is a range at least twice the 20-period average, or twice atr. These bars usually accompany news, a breakout, or a stop cascade.
Wide range bars leave footprints. Their midpoint often acts as support or resistance on later retests, and the area they travelled through quickly can become an imbalance or fair-value-gap that price returns to fill.
Trading them directly is difficult because the stop must be wide and the entry is late. The more reliable use is as a structural marker: note where the bar started, where it closed, and treat subsequent behaviour around those prices as the actual setup.
Original diagrams for the ideas on this page. Illustrative, not real market data.
Range versus trend. On the left price keeps bouncing between the same floor and ceiling, which is a range. On the right each high and each low is higher than the last, inside a pair of sloping lines called a channel.Support, resistance and the flip. Support is a price where buyers keep stepping in and the fall stops; resistance is a price where sellers keep stepping in and the rise stops. Once price closes above an old ceiling, that same level often acts as the new floor.
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