Moving Average Trend Strength from Channel Width and Price Range
Summary
This indicator colors a set of moving averages to show whether price action suggests a trend and how strong that trend may be. It supports exponential, simple, running, weighted, and volume-weighted averages. For each plotted average length, it measures the range of that average over a configurable lookback and compares it with a channel sized as a percentage of the recent high-to-low price range. A sufficiently wide moving-average channel is treated as a trend; the average's position within that channel determines direction, while the ratio of channel width to the price channel informs color intensity.
An optional linear-regression smoothing step is intended to reduce noise, with the author noting it may add one or two bars of latency. The document explains the indicator's design and adjustable inputs, but supplies no performance test or trading rules for entries, exits, or risk. Its output is therefore a visual trend assessment, not evidence of a profitable strategy. The code uses a 280-bar price range even though the written description refers to 300 bars, so implementations and interpretations should account for that discrepancy.
Key ideas
- The indicator compares the range of each moving average with a fraction of the recent price range to decide whether a trend is present.
- It uses the moving average's location within its recent channel to assign an upward or downward direction.
- Color intensity represents the measured trend strength, with green and red indicating positive and negative readings.
- Users can select among five moving-average types and optionally smooth them with linear regression.
- The document describes a visualization method but provides no strategy performance evidence or complete trade-management rules.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.