ATR-Decaying Swing Levels for Breakout Structure and Follow-Through
Summary
The indicator replaces fixed swing highs and lows with levels that decay over time by a fraction of ATR(200) per bar. Confirmed pivots reset their side’s level, so newer swings take precedence. A break occurs when price crosses the eroded level; the level then becomes inactive, producing one break segment from the pivot to the capture point. The segment’s length reflects how long the structure persisted, while its fixed slope is set by the decay parameter.
A consecutive-break counter distinguishes alternating upside and downside breaks from runs in one direction. The latest break also anchors a forward grid at one, two, and three ATR intervals as a follow-through reference. The document explains settings, pivot confirmation delay, and the need to retune decay across timeframes because it is measured per bar. These are proposed chart-reading and trade-management uses, not validated performance results; the text provides no backtest evidence that long-lived levels predict larger moves.
Key ideas
- Swing levels decay by a fixed fraction of ATR(200) on each bar, making older structure easier to break.
- Each confirmed pivot re-anchors its side’s level, and each level produces at most one break.
- The break segment’s length represents the time the level persisted before price crossed it.
- Alternating break counts suggest two-sided range behavior, while consecutive counts indicate directional structure.
- The latest break’s ATR grid provides volatility-scaled follow-through reference levels.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.