Measuring Price-Range Volatility with a Moving Average

Summary

This document describes a simple indicator that expresses an asset’s recent high-low price range in points. For each averaging period, it sums the maximum prices and subtracts the sum of the minimum prices; the result is averaged using a selectable moving-average method. The listed inputs let a user set the averaging type, period, horizontal bar shift, and optional chart levels with configurable spacing and color. The indicator is presented as a measurement of price movement size rather than direction.

The document provides a formula description and parameter list but no chart evidence, tests, markets, or comparison with other volatility measures. It does not specify how the indicator should inform entries, exits, or position sizing, and the resulting point values are not directly comparable across instruments with different price scales. It is therefore a basic range-based indicator description, not a validated trading strategy or a complete volatility-risk framework.

Key ideas

• The indicator measures volatility as the difference between averaged high and low prices, expressed in points.
• Its averaging method and period are configurable.
• A horizontal shift can move the plotted indicator across bars.
• Optional chart levels can be configured by count, starting value, spacing, and color.
• The document gives no evidence that the measure predicts returns or improves trading decisions.

Tags

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