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The Internal Bar Strength Trading Strategy
Coding and Back-testing the IBS Strategy in TradingView
Algorithmic trading strategies can also be simple. This article presents one and back-tests it in TradingView.
Introduction to the IBS
Technical indicators are tools used in technical analysis to analyze and predict future price movements in financial markets, such as stocks, commodities, or currencies. These indicators are based on mathematical calculations derived from historical price and volume data. Traders and analysts use these indicators to gain insights into market trends, identify potential entry or exit points, and make informed trading decisions.
The internal bar strength (IBS, very unfortunate name) is a very simple formula used in some algorithmic trading strategies. It follows this calculation:
On a chart, the IBS looks like a stationary indicator hovering between 0 and 1:
Obviously, the indicator is positively correlated to the price action (as can be understood from the formula and the chart). The aim now is to derive trading rules (entries and exits) to…
