Average Range from Recent Highs and Lows

Summary

The document describes a simple average-range indicator intended for daily range measurement, while noting that it can be applied to bars from any timeframe. It calculates the mean of the recent bars’ highs and subtracts the mean of their lows. The lookback length is configurable, with a sample setting provided in the source. This produces an average spread between smoothed highs and smoothed lows.

The author explicitly distinguishes this measure from Average True Range. The described calculation does not include gaps between bars or compare each bar’s high and low with the previous close, so it captures a different notion of range. The post gives the formula but no chart, market examples, parameter study, or evidence that the measure predicts future movement. It therefore serves as an indicator definition, not a tested trading rule.

Key ideas

• The indicator subtracts the average of recent lows from the average of recent highs.
• Its lookback period can be applied to daily bars or another timeframe.
• The calculation is distinct from Average True Range because it does not use prior closes.
• The document provides a formula but no trading results or validation.

Tags

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