ATR Expansion/contraction

ATR Expansion/contraction compresses the direction of volatility into one signed reading. It measures a fast ATR against a slow reference and plots the spread as a percentage around zero: positive when recent bar travel runs wider than the baseline, negative while ranges compress — the two regimes of ATR expansion and contraction. The line is solid while a state builds and dimmed once it decays, diamonds flag bars whose true range hits a multiple of prevailing ATR, and a dashboard adds state, duration, TR/ATR multiple and percentile rank.

How to Trade the ATR Expansion/contraction?

• Zero crosses: Expansion Started and Contraction Started alerts mark the fast ATR crossing its reference — the regime transitions.
• Contraction extreme: the read at its deepest compression of the lookback — the armed condition breakout traders watch; alerted even with the marker hidden.
• Expansion bars: diamonds mark the wide-range-bar signature — travel far beyond the prevailing baseline.

The read calibrates the rest of a volatility toolkit: ATR-sized stops and targets widen in expansion, tighten in contraction.

ATR Expansion/contraction Settings

• Fast ATR Length (default 5): the responsive side; shorter is faster and noisier.
• Slow ATR Length (default 20): baseline lookback, also the averaging window in slope mode.
• Reference (default Long ATR): fast over slow ATR (ratio form), or the fast ATR against its own average via Average of Fast ATR (slope form).
• True Range Multiple (default 2.0): TR-to-ATR multiple flagging an expansion bar; higher means rarer.
• Mark Expansion Bars (on) and Mark Contraction Extremes (off): the pane markers.
• Context Lookback (default 100): window for the percentile rank and the compression floor.
• Show Dashboard (on) with Position (Top Right) and Size (Small); Gradient Fill (on).

Frequently Asked Questions

How is this different from plain ATR?

The Average True Range reports volatility's level in price units, hard to compare across symbols or through time. This build reads its change instead, as a normalized percentage where zero always means equilibrium.

Which Reference mode should I pick?

Long ATR compares two independent lookbacks, responsive against structural. Average of Fast ATR tracks one ATR against its own average, reacting chiefly to its turns. Both answer the same question with slightly different timing.

What is a contraction extreme?

The reading sits at its lowest of the Context Lookback while below zero — peak compression. A condition, not a direction: energy is coiled, nothing says which way it releases.