The idea of the indicator is a variation of iVLT. Algorithm for calculation is in the following:
- on each bar calculate the range for the set number of bars, i.e. the distance from the maximum high to the minimum low.
- if range calculated on the current bar is less than the minimum range calculated on the previous bars, it is a signal of the market compression.
Parameters:
- Bars in Range - the number of bars for calculation of the range (the current bar).
- Check Period - the period of the minimum range definition.
Recommendations:
- it is not recommended to use the indicator on the small ("noise") frames.
- the indicator doesn't specify the direction, so two variants of use are available as the signal is formed:
- place stop orders at the boundaries of the signal range,
- use in pair with any trend indicator and place stop order only in the trend direction (if there was a breakthrough in the opposite direction, delete stop order).
