Adaptive Range Filtering for Price Trends and Direction Signals

Summary

The Range Filter is an experimental indicator intended to suppress small price movements so broader directional changes are easier to see. It estimates a price range, optionally smooths it, and moves the filter only when price passes a range threshold. Bands around the filter mark levels that can trigger movement. The filter can use closing prices or candle wicks, and two calculation methods are available.

Users can define the range in several ways, including average change, ATR, standard deviation, percentage of price, ticks, or fixed units. The script also offers optional averaging that updates only when the filter changes, trend-based bar colors, and a hidden bullish or bearish direction output for use by other scripts. The document explains calculation choices and visual outputs but supplies no trading rules, backtest, or evidence of predictive performance. Its settings change sensitivity and responsiveness, so the indicator’s trend display should not be treated as proof of a profitable signal.

Key ideas

• The filter ignores price moves that do not exceed a configurable range threshold.
• Range size can be based on volatility measures or fixed price units.
• The calculation can use wicks or closes and provides two filter methods.
• Optional smoothing and event-based averaging alter the filter’s responsiveness.
• A direction output and colored bars describe the filter’s current trend state, but no performance evidence is supplied.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.