Range and Break
The indicator is useful both for traders, whose strategy is inextricably linked to the breakthroughs and for those who prefer trading in a range.
The main element of the indicator is a range that consists of four lines:
- HighOut and LowOut - external boundaries of the range,
- HighInner and LowInner - internal boundaries of the range.
The indicator adjusts the range so that the price is at one of its boundaries. To identify the breakthroughs of price levels the moving average chart is used.
Breakthrough of a level indicates a trend. Rapid price reversal after a breakthrough of a level is a signal to enter the range.
Input parameters are used to adjust the indicator:
- Noise gain - noise amplification coefficient. Influences the range width. The greater is the parameter value, the bigger is the distance between the Inner and the Out lines.
- The ratio of the width to the noise - when price does not move and the noise level is high, there is no trend or moving range. This parameter indicates the minimum acceptable ratio of the range width to the noise level. If this ratio falls below this value during operation, the range boundaries will not be displayed.
- The number of bars to calculate - number of bars for calculation.