TrendRange Classifies Trends Using Volume-Weighted Price Range
Summary
TrendRange labels market conditions as weak or flat, medium, and strong. It represents each bar with a histogram value based on the candle’s point range multiplied by volume; for large price gaps, it uses the gap size multiplied by volume instead. This makes the indicator’s input responsive to both price movement and trading activity.
Bar colors are determined by comparing histogram values with their average, using mean-square deviation as the comparison scale. The document describes the indicator’s construction but provides no performance results, trading rules, or evidence that the labels predict future returns. It also notes a dependency on a separate smoothing library for MetaTrader 5, so practical use requires that library and its supporting calculations.
Key ideas
- TrendRange assigns weak or flat, medium, and strong states to market conditions.
- Its histogram combines price range with volume, substituting gap size for candle range when gaps are large.
- Color classification compares histogram values with their average using mean-square deviation.
- The document explains indicator mechanics but does not provide performance evidence or a full trading strategy.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.