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Wide-Range Bar Retracementhalf of the move that started it

Evidence: WeakBeginnerPrice action · Pullback

One bar moves a long way. Price then retraces into the middle of that bar, and the trade is taken there on the assumption that the move continues.

The 50% level has no special property — it is a convention, and the page says so rather than dressing it up. What is real is that a wide-range bar marks a moment when one side dominated, and the middle of it is a defensible place to look for them again.

The level is the edge. The candle is the timing and the stop placement — useful, and a far smaller claim than the one usually made for it.

Category
Price action · Pullback
Timeframe
H1 or H4
Suitable pairs
Gold · indices · the majors during active sessions
Session
The wide-range bar must be from London or New York
Indicators / tools
ATR(14) to define 'wide' · the bar's own high, low and midpoint

Valid setup

PA-09 · WIDE-RANGE BAR RETRACEMENT — VALID SETUP XAUUSD · H1 · one bar of more than twice the average range, then a close back up off its midpoint LONG 4316.07 4336.50 4356.93 4377.36 4397.80 4418.23 4438.66 THE WIDE-RANGE BAR'S OWN RANGE TP1 = the wide bar's high 1R — wide by construction TP1 = the bar's high ENTRY = close back up off the midpoint MIDPOINT — a convention, not a finding STOP = the bar's low − 0.3 × ATR(14) 1 2 3 4 4396.00 4372.00 4369.00 4339.40 ① One bar runs more than 2 × ATR and closes near its high ② Price retraces into the middle of it ③ Fifty per cent is convention — test other fractions ④ A CLOSE back up off the midpoint — enter ⑤ Stop under the bar's low. The position must be small ⑥ Ten-bar time stop from entry

Exact rules

Entry

  • Wide-range bar: true range at least 2 × ATR(14), closing in the top third of its range for a long.
  • Mark its midpoint. Wait for price to retrace into it, within the next ten bars.
  • Trigger: a close back up off the midpoint. Not a touch — a close.
  • If price closes below the wide bar's low at any point, the setup is dead and does not return.

Stop loss

  • Below the wide-range bar's low, minus 0.3 × ATR(14).
  • That is a wide stop by design — the bar is large. Size accordingly rather than tightening the stop to make the position feel normal.
  • Risk 0.5%.

Take profit / exit

  • TP1 at the wide bar's high. Note that this is usually a little under 1R, because the stop sits beneath the whole bar while the target is only half of it — that asymmetry is the price of a defensible invalidation and it has to be paid for with a high hit rate.
  • TP2 at 2R if price clears the high.
  • Ten-bar time stop from entry. If the continuation has not started, the domination the bar showed has been absorbed.

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Trading carries risk and most retail accounts lose money. Nothing on this page is financial advice or a recommendation to trade. The chart is an illustration of the rules on constructed candles — it is not a record of a trade and not a backtest.