This indicator tries to solve this. It uses the and filters it using a factor that is based on the standard deviation of the ATR.
The ATR based filter is calculated by first calculating the running standard deviation of the ATR, and then looking at that in relation to its recent low to find a filtering factor to use on the . This makes the more reactive to trends, but also slightly more likely to missidentify ranges.
This is the panel version of the indicator. It plots the index and min/max values, as well as background colors to tell you when it thinks the market is ranging or trending.
Yellow = Trending
Transparent gray = Ranging
- Added option to use normalized true range in the ATR filter. This is now the default.
- Changed color for exhausted trends from transparent gray to solid orange.
- Changed color for weakening exhausted trend from transparent yellow to red.
- Fixed bug where the indicator accidentally was used overlay mode.
To others trying this indicator, it's cutting edge but as with anything good, you have to dedicate some time to this one.