ATR and Stochastics by Xeodiac

This script combines two popular indicators, the Average True Range (ATR) and the Stochastic Oscillator, into a single chart for enhanced trading insights. Here’s a breakdown of how it works and what it does:

What It Does:
Average True Range (ATR):

Measures market volatility by calculating the average range of price movement over a specified period.

The ATR is plotted in blue on its natural scale, helping you assess how volatile the market is.

Stochastic Oscillator:

A momentum indicator that compares a security's closing price to its price range over a specific period.

It calculates two lines:

%K Line (Green): Tracks the raw Stochastic value.

%D Line (Red): A smoothed moving average of the %K line.

These values are plotted on a percentage scale (0-100) to indicate overbought or oversold conditions.

Inputs:
ATR Length: Specifies the number of periods used for ATR calculation (default is 14).

Stochastic %K Length: Determines the period for finding the highest high and lowest low for the %K calculation (default is 14).

Stochastic %D Smoothing: Sets the smoothing factor for the %D line (default is 3).

Visual Output:
Blue Line: Represents the ATR, showing how much price moves on average over the given period.

Green Line: The %K line of the Stochastic Oscillator, showing momentum shifts in the market.

Red Line: The %D line of the Stochastic Oscillator, providing a smoothed perspective on momentum.

Use Case:
This script is useful for:

Assessing Market Volatility: Use the ATR to understand how active the market is.

Identifying Overbought/Oversold Levels: Use the Stochastic Oscillator to identify potential reversal points.

Combining Signals: Analyze both indicators together to align volatility and momentum for better trading decisions.