R1 and S1: Defining the Range

Everything from here to the end of Part II rests on two numbers, the distance between them, and the period of time they come from. This chapter defines them precisely, shows how every other level is derived from them, and settles which candle supplies them.

Two Extremes and a Period of Time

R1 is the high of the outer box. S1 is the low. They are the top and bottom of the candle you are trading inside, and chapter 2 established that this is true for a candle of any period.

The range is the distance between them: R1 minus S1.