Separate two questions first
Direction between two times depends on the initial and final price. Range and variability describe other features of the path. Price can travel far and return, or progress relatively calmly. Neither description on its own tells us where the next bar will go.
Use the same instrument, price basis and intervals. Five daily closes and five monthly closes cover different durations. Both series below use five equally spaced hypothetical observations. The numbers are invented and do not describe a real market instrument.
The same start and finish, different intermediate prices
Series A advances one unit at a time: 100, 101, 102, 103, 104. Series B moves through 100, 104, 98, 106, 104. Both begin at 100 and finish at 104. Looking only at the endpoints hides their different behaviour in between.
| Step | Series A | Series B |
|---|---|---|
| 1 | 100.00 | 100.00 |
| 2 | 101.00 | 104.00 |
| 3 | 102.00 | 98.00 |
| 4 | 103.00 | 106.00 |
| 5 | 104.00 | 104.00 |
Three simple checks instead of one label
Net change is +4 units, or +4% of the initial 100, for both. A’s sum of absolute steps is 1 + 1 + 1 + 1 = 4. B’s is 4 + 6 + 8 + 2 = 20. Directional displacement is identical, while B’s close-to-close path is five times longer.
The range of closes is 104 − 100 = 4 for A and 106 − 98 = 8 for B. Absolute net change divided by the sum of steps gives 1 and 0.2. This is a transparent educational path check, not a new trading indicator or signal. If the sum of steps is zero, this ratio is undefined.
| Measure | Series A | Series B |
|---|---|---|
| Net change | 4.00 | 4.00 |
| Change from start | 4.00% | 4.00% |
| Sum of absolute steps | 4.00 | 20.00 |
| Range of closes | 4.00 | 8.00 |
| |Net change| / path | 1.00 | 0.20 |
Δ = last − first; path = Σ |change in close|
This is not standard volatility or ATR
Range uses only the highest and lowest observations. Absolute steps account for sequence but depend on sampling frequency. We are not calculating return standard deviation, annualised volatility, ATR or loss probability. Five closes cannot recover intrabar highs and lows.
Another sample produces other numbers. Adding or missing observations changes the comparison. Comparing different price levels needs consistent relative changes and units: “20” in USD cannot be directly compared with “20” in another currency.
A practical order for reading a chart
Name the interval and price basis first, then describe net direction and fluctuations separately. Check a longer window and whether enough history is available. Increasing variability does not select the direction of a future trade or replace a confirmation rule.
- Do not infer a trend solely from the size of individual candles.
- Do not confuse the same final percentage with the same path risk.
- Do not attribute forecasts or verified profitability to a simple table.
- Study completed-bar facts rather than future points on a chart.
Primary sources
Sources explain the mechanics and limitations; the editorial examples use invented numbers rather than market quotations.
Your next practical step
Student Wyckoff Pro helps you study closed bars and save your analysis. It does not execute trades; access and the Windows connection are explained in the guide.
Open the first-chart instructions ↗