Direct Answer
A 10-day average of the share of new highs among all new highs and new lows, sometimes called the record high percent. It shows whether new highs or new lows dominate over the recent two weeks. Readings above 50 mean new highs outnumbered new lows over the period.
High-Low Index: Formula, Meaning, Signals, Examples and How to Use It
How Is High-Low Index Calculated?
A 10-day average of the share of new highs among all new highs and new lows, sometimes called the record high percent. It shows whether new highs or new lows dominate over the recent two weeks.
Formula: Record high % = new highs / (new highs + new lows) x 100; High-Low Index = 10-day simple average of that value
Inputs:
- New 52-week highs each session
- New 52-week lows each session
- Smoothing length, commonly 10 sessions
Worked example. If a session has 90 new highs and 30 new lows, the unsmoothed record high percent is 75.0%. The inputs are illustrative numbers, not market data.
Reading it. Readings above 50 mean new highs outnumbered new lows over the period. Chartists commonly look to roughly 70 and 30 as zones of strong and weak breadth, though these are conventions and the figure is judged against its own history.
Limits. The ratio swings sharply when both counts are small, which can happen in quiet markets. Definitions of the high and low window and of the smoothing differ between sources.
What is High-Low Index?
A 10-day average of the share of new highs among all new highs and new lows, sometimes called the record high percent. It shows whether new highs or new lows dominate over the recent two weeks.
How to use High-Low Index
Readings above 50 mean new highs outnumbered new lows over the period. Chartists commonly look to roughly 70 and 30 as zones of strong and weak breadth, though these are conventions and the figure is judged against its own history. A reading alone is never a buy or sell signal; it needs context from price structure, volume, volatility and the broader market regime.
Strengths
- Dividing highs by highs plus lows bounds the daily value between 0 and 100, and the 10-day average damps single-day noise.
- It reads leadership as a share, so a market with many extremes in total still produces a percentage that compares with a quiet one.
- Reproducible when the formula and data convention are fixed.
Weaknesses and limitations
- A simple 10-day average weights every day equally and then drops it abruptly, so the line can step on the day an old extreme exits the window.
- The daily ratio is undefined on a session with no new highs and no new lows, so a convention is needed to fill the gap.
- Correlated indicators can create false confidence by repeating the same underlying information.
Editorial and risk note
This page is educational content, not individualized investment advice. It should not imply guaranteed prediction, accuracy or outperformance.
Frequently Asked Questions
Is High-Low Index a buy or sell signal?
No. Readings above 50 mean new highs outnumbered new lows over the period. The ratio swings sharply when both counts are small, which can happen in quiet markets. A trade built on it still needs a trigger, an invalidation rule, a position size and realistic execution assumptions.
What is the best setting for High-Low Index?
High-Low Index takes these inputs: new 52-week highs each session; new 52-week lows each session; smoothing length, commonly 10 sessions. There is no universal best setting for the tunable ones, so test them across instruments, regimes and out-of-sample periods and favor stable parameter regions over one historical winner.
Can High-Low Index be used by itself?
The ratio swings sharply when both counts are small, which can happen in quiet markets. Definitions of the high and low window and of the smoothing differ between sources. For that reason it is read next to measures of direction, participation, valuation, liquidity and risk, not alone.
Does High-Low Index work on every timeframe?
The calculation (Record high % = new highs / (new highs + new lows) x 100; High-Low Index = 10-day simple average of that value) can be run on any bar size, but behavior is not portable: a reading on a five-minute chart describes a very different market window from the same reading on a daily chart. Validate the exact timeframe before relying on it.
Why does High-Low Index give false signals?
A simple 10-day average weights every day equally and then drops it abruptly, so the line can step on the day an old extreme exits the window. The daily ratio is undefined on a session with no new highs and no new lows, so a convention is needed to fill the gap. Lag, noise and regime changes add to this, because market participants react to new information after the reading is calculated.
How should High-Low Index be backtested?
Rebuild High-Low Index from new 52-week highs each session using point-in-time data, write the rules before testing, include delisted securities where relevant, model realistic fills and costs, reserve a validation sample and compare with a simpler baseline.