Average True Range Level

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The indicator uses color-coded columns to represent different levels of normalized ATR, helping traders identify periods of high or low volatility.

The normalization process involves dividing the current True Range by the Average True Range. The formula for normalized ATR in the code is:

nAtr = nz(barRange/atr)

How To Use
Level < 1
During periods when the normalized ATR is less than 1, suggesting a lower level of volatility, traders may explore inside bar strategies. These strategies focus on trading within the range of the previous bar, aiming to capitalize on potential breakout opportunities.

Level between 1 and 3
In instances where the normalized ATR falls between 1 and 3, indicating moderate volatility, a pullback strategy may be considered. Traders look for temporary corrections against the prevailing trend, entering positions in anticipation of the trend's resumption

Level between 2 and 3
Within the range of normalized ATR between 2 and 3, signifying a balanced level of volatility, traders might explore breakout strategies. These strategies involve identifying potential breakout levels using support and resistance or other indicators and entering trades in the direction of the breakout.

Level > 3
When the normalized ATR exceeds 3, signaling high volatility, traders should approach with caution. While not ideal for typical mean reversion strategies, this condition may indicate that the price has become overextended. Traders might wait for subsequent candles, observing a normalized ATR between 2 and 3, to consider mean reversion opportunities after potential overpricing during the high volatility period.

* Note: These strategies are suggestions and may not be suitable for all trading scenarios. Traders should exercise discretion, conduct their own analysis, and adapt strategies based on individual preferences and risk tolerance.
Notes de version:
New input: include or exclude any gaps in current bar range calculation.
Notes de version:
Added ATR Smoothing Input.
Added rounding to the symbol's mintick in the normalized ATR calculation.
Script open-source

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