Donchian High-Low Position and Cycle-Length Indicator

Summary

This experimental indicator scales the current high and low against the highest and lowest prices over a configurable lookback, producing two normalized readings based on the Donchian range. It averages the readings, plots them alongside a running mean, and changes bar colors according to whether the average is above, below, or between two thresholds.

A simple alternating state tracks movement between range extremes: it marks a transition when the high reading reaches the upper boundary after a bearish cycle, or when the low reaches the lower boundary after a bullish cycle. It records elapsed bars for each completed phase and plots the average recorded cycle length. The document describes this as exploratory cycle information, not a tested trading system. It provides no entry, exit, or risk rules and no evidence that cycle duration predicts future prices. The normalization also depends on a nonzero Donchian range, a practical edge case not addressed in the description.

Key ideas

• The indicator normalizes current highs and lows within a rolling Donchian range.
• It averages the two readings and plots the result, a cumulative mean, and cycle measurements.
• Alternating threshold events mark cycle changes and record the number of bars between them.
• Bar colors encode whether the average is above, below, or between preset thresholds.
• The author presents the tool as experimental and gives no performance or predictive evidence.

Tags

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