Adaptive Regression Volume Heatmap for Trend and Reversion Analysis

Summary

This indicator builds a volume profile around a fitted price trend. It assigns each bar’s volume to a band based on its distance from the regression line, then smooths the distribution to show zones where trading activity has concentrated. The fit window adapts to the ratio of long and short ATR, contracting as short-term volatility rises and expanding as it falls. A projected profile extends the current distribution forward, while edge histograms estimate buying and selling pressure from where each bar closes within its range.

Reversion dots appear when price crosses a standard-deviation boundary and the channel passes a flatness test, which is intended to suppress signals during trends. The notes explain how the band width, smoothing, and color scaling affect the display, and flag that the buy/sell split is only a bar-based estimate, not order-book data. The indicator offers interpretation guidance and implementation settings, but supplies no performance testing; signals and projected value zones should not be treated as validated forecasts.

Key ideas

• The indicator bins volume by each bar’s distance from a linear regression fit rather than by absolute price.
• Its window scales with the ratio of slow to fast ATR to respond to changing volatility.
• Source standard deviation sets the channel width, and volume outside the six-standard-deviation corridor is discarded.
• Reversion dots require both a boundary crossing and a sufficiently flat channel.
• The buy/sell histograms estimate pressure from bar closes and do not measure actual order flow.

Tags

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