Ranking Current Range Compression Against Historical Percentiles
Summary
The indicator ranks the current period’s range against the empirical distribution of ranges from a chosen number of completed periods. It reports the share of historical ranges that were smaller, rather than dividing the current range by an average. This percentile framing can better reflect skewed histories in which occasional large moves inflate the mean. Configurable thresholds classify readings as compressed, normal, or expanded, with a gauge displaying the rank from low to high.
The proposed use is to monitor unusually quiet conditions before possible range expansion and to recognize when a period has already moved unusually far. The document explains that these states describe historical context, not forecasts: compression does not guarantee a breakout, and an expanded reading does not prove a move is over. It gives default settings and describes use across symbols and chart timeframes, but supplies no backtest, predictive statistics, or evidence that the suggested thresholds improve trading results. The indicator visualizes ranges and does not execute orders.
Key ideas
- The indicator ranks the current range against the empirical distribution of completed historical ranges.
- A percentile rank can describe skewed range histories more directly than comparison with a mean.
- Thresholds label readings as compressed, normal, or expanded, and a gauge visualizes the rank.
- Compression may precede expansion, but the reading is descriptive and does not predict a breakout.
- The document supplies no backtest or evidence that its default thresholds are profitable.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.