Can someone create an ATR Ratio indicator?

[FrankN]

Greetings, I was reading/learning about the use of ATR, and saw something that interested me. I use ATR as a lower study, and set horizontal lines for Low volume, Ideal zone, and High volume, on a 2 minute chart for futures trading, with a period of 5.
Can someone create a simple lower chart for this?
Thoughts? TIA

How to Refine Your "Safe Zone"
Instead of using fixed numbers like "15, 25, 45,"etc. many professionals use the ATR Ratio. You compare the current 5-period ATR (on a 2 min chart) to a longer 20-period ATR.

• If the 5-period is 1.5x higher than the 20-period, you have a volatility breakout
• If the 5-period is less than 0.8x of the 20-period, the market is "asleep."

 

[antwerks]

Greetings, I was reading/learning about the use of ATR, and saw something that interested me. I use ATR as a lower study, and set horizontal lines for Low volume, Ideal zone, and High volume, on a 2 minute chart for futures trading, with a period of 5.
Can someone create a simple lower chart for this?
Thoughts? TIA

How to Refine Your "Safe Zone"
Instead of using fixed numbers like "15, 25, 45,"etc. many professionals use the ATR Ratio. You compare the current 5-period ATR (on a 2 min chart) to a longer 20-period ATR.

• If the 5-period is 1.5x higher than the 20-period, you have a volatility breakout
• If the 5-period is less than 0.8x of the 20-period, the market is "asleep."

declare lower;

input FastATRLength = 5;
input SlowATRLength = 20;

def ATRfast = Average(TrueRange(high, close, low), FastATRLength);
def ATRslow = Average(TrueRange(high, close, low), SlowATRLength);

def ATRratio = ATRfast / ATRslow;

plot Ratio = ATRratio;
Ratio.SetLineWeight(2);

# Zone Levels
plot SleepLevel = 0.8;
SleepLevel.SetDefaultColor(Color.GRAY);
SleepLevel.SetStyle(Curve.SHORT_DASH);

plot IdealLevel = 1.0;
IdealLevel.SetDefaultColor(Color.YELLOW);

plot BreakoutLevel = 1.5;
BreakoutLevel.SetDefaultColor(Color.RED);
BreakoutLevel.SetStyle(Curve.SHORT_DASH);

# Coloring the ratio line
Ratio.AssignValueColor(
    if ATRratio < SleepLevel then Color.DARK_GRAY
    else if ATRratio < BreakoutLevel then Color.GREEN
    else Color.RED
);

 

[antwerks]

If you are into futures use this on the 1-3 minute charts

# ANTWERKS

declare lower;

input FastATRLength = 5;
input SlowATRLength = 20;
input CompressionLevel = 0.8;
input ExpansionLevel = 1.5;
input AccelThreshold = 0.15;

# ATR calculations
def ATRfast = Average(TrueRange(high, close, low), FastATRLength);
def ATRslow = Average(TrueRange(high, close, low), SlowATRLength);

def ATRratio = ATRfast / ATRslow;
def ATRaccel = ATRfast - ATRfast[1];

plot Ratio = ATRratio;
Ratio.SetLineWeight(2);

# Zone lines
plot Compression = CompressionLevel;
Compression.SetDefaultColor(Color.GRAY);
Compression.SetStyle(Curve.SHORT_DASH);

plot Neutral = 1.0;
Neutral.SetDefaultColor(Color.YELLOW);

plot Expansion = ExpansionLevel;
Expansion.SetDefaultColor(Color.RED);
Expansion.SetStyle(Curve.SHORT_DASH);

# Ratio color logic
Ratio.AssignValueColor(
    if ATRratio < CompressionLevel then Color.DARK_GRAY
    else if ATRratio < ExpansionLevel then Color.GREEN
    else Color.RED
);

# ACCELERATION DETECTION
plot Acceleration = if ATRaccel > AccelThreshold then ATRratio else Double.NaN;
Acceleration.SetPaintingStrategy(PaintingStrategy.POINTS);
Acceleration.SetLineWeight(4);
Acceleration.SetDefaultColor(Color.CYAN);

# COMPRESSION SQUEEZE
def Squeeze = ATRratio < CompressionLevel;

plot CompressionSignal = if Squeeze then ATRratio else Double.NaN;
CompressionSignal.SetPaintingStrategy(PaintingStrategy.POINTS);
CompressionSignal.SetDefaultColor(Color.YELLOW);
CompressionSignal.SetLineWeight(3);

# LABELS
AddLabel(yes,
    if ATRratio < CompressionLevel then "VOLATILITY COMPRESSION"
    else if ATRratio < ExpansionLevel then "IDEAL TRADING VOLATILITY"
    else "VOLATILITY EXPANSION",
    
    if ATRratio < CompressionLevel then Color.GRAY
    else if ATRratio < ExpansionLevel then Color.GREEN
    else Color.RED);

AddLabel(yes,
    if ATRaccel > AccelThreshold then "ATR ACCELERATION (BREAKOUT RISK)"
    else "ATR STABLE",
    
    if ATRaccel > AccelThreshold then Color.CYAN
    else Color.GRAY);

 

[FrankN]

Antwerks, your the best. Let me take a look at these tomorrow. Thank you!