Intraday Uncertainty [PhenLabs]

📊 Intraday Uncertainty [PhenLabs]
Version: PineScript™ v6

📌 Description
The Intraday Uncertainty indicator offers traders a visual representation of market certainty/uncertainty during trading sessions. By comparing each price bar’s range to the Average True Range (ATR), it provides an intuitive way to gauge market conviction through a color gradient system.

This tool helps traders identify periods of high certainty (potentially trending markets) versus high uncertainty (potentially choppy or volatile markets) without complex calculations or multiple indicators. The color-coded bars create an immediate visual cue to support decision-making in varying market conditions.

🚀 Points of Innovation

• Automated range-to-ATR ratio calculation that adapts to changing market volatility
  
• Dynamic color gradient system that visually distinguishes between certain and uncertain price action
  
• Customizable gradient clamping to fine-tune sensitivity to market conditions
  
• Integrated dashboard that provides clear interpretation guidance
  
• Position-flexible legend that accommodates different chart layouts
  
• Highly optimized for performance with minimal calculation overhead
  

🔧 Core Components

• ATR Calculation: Measures market volatility using a configurable lookback period
  
• Range-to-ATR Ratio: Compares current bar’s high-low range against average volatility
  
• Gradient Mapping System: Converts numerical uncertainty values into an intuitive color scale
  
• Dashboard Legend: Provides clear interpretation guidance with customizable positioning
  

🔥 Key Features

• Bar Coloring: Instantly identifies market certainty levels through intuitive color gradients
  
• Customizable ATR Period: Adjust sensitivity to historical volatility based on trading style
  
• Gradient Clamping: Fine-tune the color sensitivity using the Range/ATR multiplier
  
• Color Customization: Personalize the color scheme to match your chart aesthetics
  
• Informative Dashboard: Quickly interpret color meanings with the optional on-chart legend
  
• Flexible Display Options: Customize dashboard position and text size for your chart layout
  

🎨 Visualization

• Color Gradient: Bars colored on a spectrum from green (high certainty) to red (high uncertainty)
  
• Dashboard Legend: Optional on-chart guide explaining the color interpretation
  
• Color Intensity: Stronger colors indicate more extreme certainty/uncertainty levels
  
• At-a-glance Interpretation: Quickly identify market conviction without analyzing numbers
  

📖 Usage Guidelines
Calculation Settings

• ATR Period
  Default: 14
  Range: 1+
  Description: Controls the lookback period for ATR calculation. Lower values increase sensitivity to recent volatility, while higher values provide more stability.
  
  
• Gradient Clamp (Range/ATR Multiplier)
  Default: 2.0
  Range: 0.1+
  Description: Sets the maximum Range/ATR ratio for gradient scaling. Ranges above this value display the end color (high uncertainty).
  

Color Settings

• Gradient Start Color (High Certainty)
  Default: Green
  Description: Color representing high market certainty (low Range/ATR ratio)
  
  
• Gradient End Color (Low Certainty)
  Default: Red
  Description: Color representing low market certainty (high Range/ATR ratio)
  

Dashboard Settings

• Show Dashboard Legend
  Default: True
  Description: Toggles the visibility of the on-chart interpretation guide
  
  
• Dashboard Position
  Options: top_right, top_left, bottom_right, bottom_left, middle_right, middle_left
  Default: bottom_right
  Description: Controls the placement of the dashboard on your chart
  
  
• Dashboard Text Size
  Options: tiny, small, normal, large, huge
  Default: normal
  Description: Adjusts the text size of the dashboard for readability
  

✅ Best Use Cases

• Identifying potential trend shifts when certainty levels change dramatically
  
• Confirming trend strength through consistent certainty levels
  
• Detecting choppy/sideways markets with persistent high uncertainty
  
• Filtering trading signals from other indicators based on certainty levels
  
• Gauging market conviction behind price breakouts or pullbacks
  
• Optimizing entry/exit timing based on certainty/uncertainty transitions
  

⚠️ Limitations

• Does not predict future price direction, only measures current bar certainty
  
• May provide false signals during news events or unexpected volatility spikes
  
• Requires context within the broader market environment for optimal interpretation
  
• Color interpretation is relative rather than absolute across different securities
  
• ATR-based calculation means sensitivity varies across different timeframes
  

💡 What Makes This Unique

• Simplicity: Single visual indicator that doesn’t require multiple technical tools
  
• Adaptability: Automatically adjusts to changing market volatility conditions
  
• Contextual Analysis: Provides market conviction context beyond just price movement
  
• Intuitive Design: Color-based system that requires minimal learning curve
  
• Efficiency: Lightweight calculation that doesn’t impact chart performance
  

🔬 How It Works

• 1. ATR Calculation:
  Calculates the Average True Range using the specified period
  Establishes a baseline for normal market volatility
  
  
• 2. Range Analysis:
  Measures each bar’s high-low range
  Compares this range to the current ATR value to create a ratio
  
  
• 3. Gradient Mapping:
  Converts the Range/ATR ratio to a normalized value between 0 and 1
  Maps this value onto a color gradient between the start and end colors
  Applies the resulting color to the price bar
  
  
• 4. Dashboard Creation:
  Constructs an information panel on the last visible bar
  Populates it with color samples and interpretation guidance
  

💡 Note:
This indicator works best when used in conjunction with other technical analysis tools rather than in isolation. The certainty/uncertainty measure provides context for your trading decisions but should not be the sole basis for entries and exits. Consider using higher certainty periods for trend-following strategies and exercise caution during periods of high uncertainty.