ATRx Extension Helper – Distance from 50 DMA in ATR Multiples

📌 Credits
This TradingView indicator is inspired by Kyna Kosling’s article “How I Leverage AI to Customise My Charts” on The Trading Resource Hub and builds on the ATRx concept he adapted from the work of Jeff Sun.
Special thanks to both for the idea of using ATR multiples relative to the 50-day moving average (DMA) as a framework for trade management and risk control.

🧠 What This Indicator Does
This script calculates how extended the current price is above the 50-day moving average, measured in multiples of the 14-period Average True Range (ATR). It helps traders visualise stretched price action and manage entries and exits with more objectivity.

Bar colours:

🔶 Orange: 4–7.5× ATR above 50 DMA → Caution zone – avoid new entries

🔴 Pink: 7.5–10× ATR → Consider taking partial profits

🔵 Blue: ≥10× ATR → High-risk zone – take profits or exit

The indicator also plots the ATRx value — the ratio of price extension from the 50 DMA to the average true range — giving traders a live gauge of how extended a stock is on a volatility-adjusted basis.

🧮 Formula:

ATRx = ((Price - MA50) / MA50) ÷ (ATR / AvgPrice)
This gives a clean, normalised metric that can be used for conditional formatting, alerts, or trade rules.

🧰 Why Use This Indicator?

Helps prevent chasing extended moves

Encourages disciplined exits into strength

Adds structure to trade selection based on volatility-adjusted price distance

Works well for both intraday and swing trading