Volatility-Normalized Range Oscillator with Heatmap Zones

Summary

This indicator measures the close’s distance from a movement-weighted mean and scales that distance by an ATR-based range width. The resulting oscillator is centered around zero, with reference levels at plus and minus one hundred. Its parameters set the minimum lookback used for the range and a multiplier for ATR; the script also calculates whether recent closes fit within that volatility-adjusted width.

A heatmap assigns colors according to the oscillator’s direction and how often price has interacted with levels over a recent window. The accompanying explanation proposes using positive or negative readings for directional context, boundary breaks as possible breakout or exhaustion signals, returns toward zero for mean-reversion setups, and divergence for potential weakness or strength. These are interpretive suggestions rather than tested rules: the document reports no performance evidence, and the indicator alone does not specify execution, risk limits, or confirmation requirements. Its adaptive calculations and color thresholds are parameter-sensitive.

Key ideas

• The oscillator expresses the close’s distance from a movement-weighted mean in ATR-scaled units.
• A range-length parameter and ATR multiplier govern the equilibrium band’s responsiveness and width.
• Heatmap colors reflect directional bias and the frequency of interaction with oscillator levels.
• The accompanying guidance discusses trend context, range breaks, reversion toward zero, and divergence.
• The document offers no tested results 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.