OPEN-SOURCE SCRIPT
Calmness Index [racer8]
Calmness is a theory of mine that says that the more a series of bars resembles a rectangle or base pattern, the more calm it is.
I mean think about it, when is price at it's calmest? When it's not moving of course :) And nothing better demonstrates a dead market like a base pattern. That is what makes this indicator so unique.....it's ability to detect the formation of a price base.
Calculation:
Calmness = (sum of true ranges) / (range * n periods) .............. where range = highest - lowest over n periods
The above formula reflects that the higher the Calmness value, the more calm price is.
What I would do with indicator is only trade when the previous period's calm value is higher than the set dashed level (purple line).
Colors: If market is calm, indicator is gray otherwise orange ........ Enjoy :)
I mean think about it, when is price at it's calmest? When it's not moving of course :) And nothing better demonstrates a dead market like a base pattern. That is what makes this indicator so unique.....it's ability to detect the formation of a price base.
Calculation:
Calmness = (sum of true ranges) / (range * n periods) .............. where range = highest - lowest over n periods
The above formula reflects that the higher the Calmness value, the more calm price is.
What I would do with indicator is only trade when the previous period's calm value is higher than the set dashed level (purple line).
Colors: If market is calm, indicator is gray otherwise orange ........ Enjoy :)
Open-source script
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