Channel Balance Oscillator from Price Position Within a Rolling Range

Summary

The Channel Balance indicator measures where the median price, defined as the average of the high and low, sits within the highest-to-lowest price range over a chosen period. It first normalizes that position: subtract the period low from the median price and divide by the range. The resulting value is then passed through a simple moving average over the same period and multiplied by 100 to form the oscillator.

The indicator has one configurable input, the lookback period used to calculate the rolling price channel. Its formula describes a smoothed measure of the median price’s relative location within that channel. The document supplies no thresholds for trading signals, interpretation rules, or performance evidence, so it defines the calculation but does not establish how the oscillator should be used or whether it is profitable. When the period’s high and low are equal, the range is zero, and the stated normalization formula does not specify how that case is handled.

Key ideas

• The indicator locates the median price within the period’s highest-to-lowest price range.
• It normalizes the median price’s distance from the period low by the full range.
• The normalized value is smoothed with a simple moving average and multiplied by 100.
• The lookback period controls the rolling channel and smoothing calculation.
• The description provides no signal thresholds or performance evidence and does not address a zero-width range.

Tags

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