- Min : Minimum period of the in the range
- Max : Maximum period of the in the range
- Smooth : Period of the
- Src : Input series of the indicator
The indicator is a normalized oscillator. A value of 100 indicates that 100% of the current closing price is over SMA's with periods ranging from min to max, this indicates a market, while a value of 0 would indicate a market.
In this image the indicator use min = 50 and max = 200, here AMD has been strongly at the start, and ended being strongly at the end, during this period the indicator is over its overbought level, while it is under its oversold level during the period.
In case the market is ranging we can expect the indicator to be around 50%, using the smoothed result might be more useful to detect ranging markets with this indicator.
If the smoothed result is within the overbought/oversold levels, then we can say that the market is either ranging or transitioning from a / market to an opposite one.
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.
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You can also check out some of the indicators I made for luxalgo : https://www.tradingview.com/u/LuxAlgo/#published-scripts