Dec wedge
Marks bars where the 100-bar low falls faster than the high: a widening channel, not the wedge its name says.
Dec wedge builds a channel from the highest and lowest closes of the last 100 bars, then takes each line's percent change over the last 20 bars. It fires when the lower line has dropped by more than eps (default 0.05%), is falling faster than the upper line, and the upper line still sits above the lower one. Because the lower line falls faster, the channel widens, which is the opposite of a descending wedge.
How to read it
- Markers sit on the candles where all three conditions hold. A run of consecutive markers counts as one firing.
- The floor and ceiling lines are not drawn, so read the markers against the candles.
- At defaults a run lasts about 20 bars, and there are about four runs a session on SPY.
- A marker means the range between the 100-bar low and high is growing while the low drops.
What it outputs
- Dec wedge
- True on bars where the lowest close of 100 bars has dropped more than eps percent over 20 bars, faster than the highest close, with the high still above the low.
When it fires
Fires on each bar where the lowest close of the last 100 bars has dropped more than eps percent over 20 bars, faster than the highest close. A run's first bar is the firing. It means the range is widening as the low drops. Default SPY sample: 81 runs over 21 sessions, on 7.9% of bars.
Settings
- eps
- Minimum drop of the lower line over 20 bars, in percent (0.05 is about 38 cents near $765). Raising it fires only on steeper drops, so fewer markers. Lowering it to 0 fires on any drop; negative values also pass a lower line rising up to that percent.
Pitfalls
- The name says descending wedge, but the spread test is inverted: a converging wedge needs the ceiling to fall faster. asc_wedge tests the converging direction. Looks like a sign error.
- Fires often at defaults, about four runs a session on SPY. eps 0.05 is a 0.05% move over 20 bars, so the lower line need only drop about 38 cents.
- Built from closes, not highs or lows, so intrabar wicks never set the lines.