Twin Range Filter – Buy/Sell Signals

The Twin Range Filter – Buy/Sell Signals indicator is a trend-following tool that combines two adaptive volatility filters to identify potential market reversals and trend continuations by filtering out market noise.

Usage

The Twin Range Filter is primarily used to identify entry points and trend direction. It plots "Long" and "Short" labels on the chart to signal potential trades:

• Long Signals: Occur when price action breaks above the calculated filtered range and short-term upward momentum is confirmed.
• Short Signals: Occur when price action breaks below the filtered range and short-term downward momentum is confirmed.

Traders can use the background color highlights to quickly assess the current directional bias of the market. The tool is suitable for intraday or swing trading and can serve as a trend confirmation filter for broader strategies.

Details

The indicator functions by calculating a dynamic range around the price using two configurable smoothing periods: a fast period and a slow period. By utilizing two ranges, the script creates a "twin" filter system that balances sensitivity with noise reduction. The signals are generated based on the interaction between price action and these calculated ranges, ensuring that signals are only produced when price shows significant strength or weakness relative to historical volatility.

Settings

• Source: Determines the price data used for calculations (e.g., Close, Open, High, Low).
• Fast Period: Adjusts the sensitivity of the short-term filter; lower values react faster to price changes.
• Slow Period: Adjusts the sensitivity of the long-term filter; higher values provide a smoother, more stable trend assessment.
• Range Multiplier: Controls the width of the volatility envelope; increasing this reduces signal frequency but filters more noise.

FAQ

How do I use the Buy/Sell signals?

Signals appear as labels on your chart. A green "Long" label suggests a potential upward trend shift, while a red "Short" label suggests a potential downward trend shift.

Can I use this for automated trading?

Yes, the script includes built-in alert conditions for both Long and Short signals, which can be connected to external execution bridges or used for manual notifications.

How can I access this indicator?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.