Range Finder: Forecasting the Next Bar High and Low

This useful indicator was independently discovered by multiple commodity futures traders, but Arne Gronfelt generally gets the credit for it. I find it also useful with FX charts.

Tip: Many of the simple bar chart patterns, methods, and systems developed by traders for commodity futures trading in the 1950s, 1960s, and 1970s have yet to find their way to FOREX traders. There may be gold in them thar hills yet!

The formula enables the trader to forecast the next bar high and low. Charts are refractive, so you can use it on anything from 1-minute to 1-week.

To find the next bar low, you add today's high + low + close, then divide the sum by 3, then multiply the total by 2, and from that figure you subtract today's high. The result is often a close approximation of the next bar's low price. To find the next bar high, use the same initial equation but rather than the high, subtract the current bar. The result is often a close approximation of the next bar's high. When range finder is on, it can really be on. I have seen it forecast as many as seven consecutive 1-hour bars with amazing accuracy.

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Tip: Use the range finder on all three of your trader profile charts to get a forecast at different price levels. Watch especially for where they overlap.

By Michael Duane Archer
Michael Duane Archer has been an active futures and FOREX trader for more than 35 years. He has worked in various advisory capacities, notably as a commodity trading advisor, registered SEC investment advisor, and branch manager for Heinold of Hawaii. He currently trades FOREX and futures and is involved in several technical analysis research projects.

Copyrighted 2016. Content published with author's permission.

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