Quantum Range Filter by MRKcoin

6 ago

### Quantum Range Filter by MRKcoin

**Overview**

This indicator is a sophisticated range detection tool designed based on the principles of quantitative multi-factor models. Instead of relying on a single condition, it assesses the market from three different dimensions to provide a more robust and reliable identification of range-bound (sideways) markets.

When the background is highlighted in red, it indicates that the market is likely in a range phase, suggesting that trend-following strategies may be less effective, and mean-reversion (range trading) strategies could be more suitable.

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**Core Logic: A Multi-Factor Approach**

The filter evaluates the market state using the following three independent factors:

1. **Momentum Volatility (RSI Bollinger Bandwidth):**
* **Question:** Is the momentum of the market contracting?
* **Method:** It measures the width of the Bollinger Bands applied to the RSI. A narrow bandwidth suggests that momentum is consolidating, which is a common characteristic of a range market.

2. **Price Volatility (ATR Ratio):**
* **Question:** Is the actual price movement shrinking?
* **Method:** It calculates the Average True Range (ATR) as a percentage of the closing price. A low ratio indicates that the price volatility itself is low, reinforcing the case for a range environment.

3. **Absence of Trend (ADX):**
* **Question:** Is there a lack of a clear directional trend?
* **Method:** It uses the Average Directional Index (ADX), a standard tool for measuring trend strength. A low ADX value provides active confirmation that the market is not in a trending phase.

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**How to Use**

1. **Range Detection:** The primary use is to identify ranging markets. The red highlighted background serves as a visual cue.

2. **Strategy Selection:**
* **Inside the Red Zone:** Consider using range-trading strategies (e.g., buying at support, selling at resistance, using oscillators like RSI or Stochastics for overbought/oversold signals). Avoid using trend-following indicators like moving average crossovers, as they are prone to generating false signals in these conditions.
* **Outside the Red Zone:** The market is likely trending. Trend-following strategies are more appropriate.

3. **Parameter Tuning (In Settings):**
* **This is the key to adapting the filter to any market or timeframe.** Different assets (like BTC vs. ETH) and different timeframes have unique volatility characteristics. Don't hesitate to adjust the parameters to fit the specific chart you are analyzing.
* **Range Detection Score:** This is the most important setting. It determines how many of the three factors must agree to classify the market as a range. The default is `2`, which provides a good balance.
* If the filter seems **too sensitive** (highlighting too often), increase the score to `3`.
* If the filter seems **not sensitive enough** (missing obvious ranges), decrease the score to `1`.
* **Factor Thresholds:** For fine-tuning, adjust the thresholds for each factor.
* **`RSI BB Width Threshold`:** If you want to detect even tighter momentum consolidations, *decrease* this value.
* **`ATR Ratio Threshold`:** If you want to be stricter about price volatility, *decrease* this value.
* **`ADX Threshold`:** To be more lenient on what constitutes a "trendless" market, *increase* this value (e.g., to 30). To be stricter, *decrease* it (e.g., to 20).
* **Pro Tip:** Use the Debug Table (uncomment it in the script's code) to see the live values of each factor. This will give you a clear idea of how to set the thresholds for the specific asset you are trading.

**Disclaimer**

This indicator is a tool to assist in market analysis and should not be used as a standalone signal for making financial decisions. Always use it in conjunction with your own trading strategy, risk management, and analysis. Past performance is not indicative of future results.

**Credits**

* **Concept & Vision:** MRKcoin

6 ago

Note di rilascio

//─ How to Tune (Quick Guide) ──────────────────────────────────────────────────
// Different assets (e.g., BTC vs. ETH) have unique volatility profiles.
// Adjust these parameters to fit the specific chart you are analyzing.
//
// 1. Range Detection Score (Main Control):
// - For MORE sensitivity (more red zones), set to 1.
// - For LESS sensitivity (stricter filtering), set to 3.
//
// 2. Thresholds (Fine-Tuning):
// - RSI BB Width: Lower value = Stricter (detects only extreme momentum consolidation).
// - ATR Ratio: Lower value = Stricter (detects only very low price volatility).
// - ADX: Lower value = Stricter (detects only completely dead trends).
// Higher value = More lenient (allows for some trendiness).
//──────────────────────────────────────────────────────────────────────────────