Range Filter Signals from Smoothed Price Movement

Summary

This indicator produces alternating long and short signals using a range filter built from smoothed absolute price changes. It first smooths price movement over a sampling period, scales that range by a multiplier, and uses the resulting band to constrain how quickly the filter line can move. Consecutive rises or falls in the filter track directional persistence. A long signal occurs when price is above the filter and the filter is rising, after a prior short state; a short signal is triggered by the corresponding downward condition after a prior long state. The suggested settings are a sampling period of 100 and a range multiplier of 3. The published configuration uses BTC/USDT futures on a 30-minute chart, but offers no performance results.

The method can help turn noisy price movement into directional signals, but it has no documented stop, target, or position-sizing rules. Its results will depend on the chosen source, period, multiplier, market, and timeframe. The document presents the script as a source of buy and sell signals, so its backtest settings should not be read as evidence of profitable performance.

Key ideas

• The filter scales a smoothed measure of absolute price changes to create a range that limits its movement.
• Rising and falling filter sequences track directional persistence.
• Signals switch direction only when price and filter conditions oppose the previous signal state.
• The suggested settings are a 100-period sampling length and a range multiplier of 3.
• No performance results or explicit trade risk rules are provided.

Tags

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