Volatility-Adjusted Range Detection with Weighted Closes

Summary

This indicator marks consolidation zones when recent closing prices stay near a custom centerline. It calculates that centerline as a weighted average, assigning more weight to bars with larger close-to-close moves, then compares the maximum distance of recent closes from the average with an envelope based on a long-period ATR and a user-set multiplier. When the range condition begins, it draws a box and extends it while the condition holds.

The box changes color when the close moves above or below its bounds, making potential breakouts or breakdowns visible. The settings let users adjust the minimum range length, envelope width, and break highlighting. The document provides the calculation logic and a conceptual explanation, but no backtest, performance evidence, or guidance for trade sizing and exits. The visual breakout marker is a price condition, not evidence that a move will continue; results may also depend on chart history and chosen settings.

Key ideas

• The range condition requires recent closes to remain within an ATR-scaled distance of a movement-weighted centerline.
• The centerline gives greater influence to bars with larger close-to-close changes.
• The minimum range length and width multiplier affect how readily zones form and how wide they are.
• Box colors indicate closes beyond the upper or lower boundary but do not establish breakout follow-through.
• The document describes an indicator and supplies no performance testing or trade management rules.

Tags

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