Inside Bar Chain Detector

// This Pine Script™ code is subject to the terms of the Mozilla Public License 2.0 at https://mozilla.org/MPL/2.0/
// © MajorThorn

//@version=6
indicator('Inside Bar Chain Detector', shorttitle='Inside Chain 🔗', overlay=true, max_labels_count=500)

// ============================================================================
// 📊 USER INPUTS
// ============================================================================

// Visual Settings
showLabels = input.bool(false, 'Show Chain Info Labels', tooltip='Display labels showing chain length and range contraction percentage')
markerColor = input.color(color.yellow, 'Marker Color', tooltip='Color of the marker displayed below inside bars')
labelColor = input.color(color.new(color.white, 0), 'Label Text Color', tooltip='Color of the text in chain info labels')
labelBgColor = input.color(color.new(color.blue, 20), 'Label Background', tooltip='Background color for chain info labels')

// ============================================================================
// 📈 INSIDE BAR CHAIN DETECTION LOGIC
// ============================================================================

// An inside bar fits completely within the previous bar's range
// High must be lower than previous high AND low must be higher than previous low
isInsideBar = high < high[1] and low > low[1]

// Track anchor bar (the bar that starts the chain) using state variables
var float anchorHigh = na  // High of the anchor bar
var float anchorLow = na   // Low of the anchor bar
var int chainLength = 0     // Number of bars in current chain (including anchor)

// When we find an inside bar, check if we're continuing a chain or starting a new one
if isInsideBar
    if chainLength == 0
        // First inside bar in a new chain - the anchor is the previous bar
        anchorHigh := high[1]
        anchorLow := low[1]
        chainLength := 2  // Anchor + this inside bar
    else
        // Continuing existing chain
        chainLength := chainLength + 1
else
    // Chain broken - reset
    anchorHigh := na
    anchorLow := na
    chainLength := 0

// Calculate range contraction relative to anchor bar
currentRange = high - low
anchorRange = anchorHigh - anchorLow
rangeContraction = not na(anchorRange) and anchorRange > 0 ? (currentRange / anchorRange) * 100 : na

// ============================================================================
// 🎨 VISUAL OUTPUT
// ============================================================================

// Mark every inside bar with a yellow diamond below the bar
plotshape(
     series=isInsideBar,
     location=location.belowbar,
     style=shape.diamond,
     size=size.auto,
     color=markerColor,
     title='Inside Bar Marker'
     )

// Show optional labels with chain length and range contraction
if showLabels and isInsideBar and not na(rangeContraction)
    labelText = str.format('Chain: {0}\nCompression: {1}%', chainLength, str.tostring(rangeContraction, '#.#'))
    label.new(
         bar_index,
         low,
         text=labelText,
         style=label.style_label_up,
         color=labelBgColor,
         textcolor=labelColor,
         size=size.small
         )