This indicator measures the Tolerance in the price, it works on all timeframes,
The main goal actually was to indicate the undefined trend zones like when the price is squeezed, the indicator value will be very close to zero (at this zone you should not place any orders)
But also the moving averages may give a good signals on the indicator, crossing up moving average indicate a long signal, you may need aid of other indicators to make sure this zone is long before going long in a bullish trap!