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Internal Bar Strength (IBS)

Summary

Internal Bar Strength: where the close sits inside its own bar's range. It is 0 when the bar closes at its low, 1 at its high and 0.5 at the midpoint, and it reads one bar only, with no window and no state.

It is the closing half of a stochastic oscillator taken over a single bar, which is how the paper that named the effect describes it. Low readings say the session ended on weakness, high readings on strength, and the published use is mean reversion on the next bar rather than trend confirmation.

Formula

range[i] = high[i] - low[i]

IBS[i] = (close[i] - low[i]) / range[i], when range[i] > 0

IBS[i] = 0.5, when range[i] <= 0

Notes

A bar with no range -- one traded price, or none -- has no inside to locate the close in, and answers 0.5, the bar's own midpoint. The same value is returned for an inverted bar, one whose high is below its low. Zero is not that neutral point: it is the reading for a close at the low, which is the published signal to buy.

The test on the range is exact rather than a tolerance band. A bar's range is the difference of two prices within a factor of two of each other, so it is exact in IEEE arithmetic and is never a residue of cancellation. A fixed band would instead scale with the quote unit and would zero out any instrument quoted small enough to fall under it.

The output is not clamped. A close outside its own bar, which is bad data rather than a market event, passes through as a value below 0 or above 1.

Multiplying by 100 gives the percent form used by some platforms, and a moving average over this output gives the smoothed form.

Inputs

  • inHigh — High price of each bar
  • inLow — Low price of each bar
  • inClose — Close price of each bar

Outputs

  • outReal — Position of the close within the bar's range, 0 to 1 on a bar with range

Properties

Numerical Stability: Start-Independent

☐ Overlap Input
✅ Independent Y-Axis i
☐ Candlestick
☐ Can Output NaN or ±Inf
☐ Identity at Period 1

Implementation

TA-Lib Definition: ibs.c · ibs.yaml

NativeFile
Cta_IBS.c
Rustibs.rs
JavaCore_IBS.java
C#Core_IBS.cs

TA-Lib is also available for Python, R and more using a wrapper.

Aliases

Internal Bar Strength, Closing Range

See Also

  • BOP — the same bar's range, measuring the close against the open instead of the low
  • STOCHF — the same ratio over a window of bars, on a 0 to 100 scale
  • PERCENTB — the position of the close inside Bollinger Bands rather than inside the bar

References

  • Alexander Soffronow Pagonidis, "The IBS Effect: Mean Reversion in Equity ETFs", 2013 — names the effect, gives the formula and the 0.2 / 0.8 thresholds.
  • Pandey and Joshi, "Using Internal Bar Strength as a Key Indicator for Trading Country ETFs", arXiv:2306.12434, 2023.
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