Twin Range Filter Visualized

The Twin Range Filter Visualized indicator provides a comprehensive trend-following framework by calculating two distinct price ranges to generate actionable buy and sell signals on the chart. It enhances traditional range filter methods by visualizing the underlying filter line, which acts as a dynamic trailing stop-loss similar to the SuperTrend indicator.

Usage

The Usage section describes how the script can be used, particularly in identifying trend reversals and maintaining positions. Traders can utilize the indicator in the following ways:

• Trend Identification: When the price is above the filter line, the line turns green, indicating a bullish trend. When the price is below the filter line, the line turns red, indicating a bearish trend.
• Entry Signals: A "BUY" signal is triggered when the price crosses above the filter line. Conversely, a "SELL" signal is triggered when the price crosses below the filter line.
• Trailing Stop-Loss: The visualized filter line adjusts dynamically based on volatility. In a long position, the line follows the price from below; in a short position, it follows from above, providing a visual reference for exit points.

Details

The script is based on the original logic by @KivancOzbilgic and @colinmck. It calculates two smoothed price ranges using different periods—a fast period (default 27) and a slow period (default 55).

The core calculation involves:

1. Determining an average range based on the Exponential Moving Average (EMA) of absolute price changes.
2. Smoothing this range twice to filter out market noise.
3. Averaging the fast and slow smoothed ranges to create a composite volatility filter.
4. Applying a range filter algorithm that dictates whether the filter line should move up, move down, or stay flat based on price action relative to the calculated ranges.

Settings

The settings are categorized to allow for fine-tuning the sensitivity of the filter:

• Source: Determines the price data used for the calculations (default is Close).
• Show Buy/Sell Signals?: Toggles the visibility of the "BUY" and "SELL" labels on the chart.
• Fast Period: Sets the lookback period for the fast range calculation.
• Fast Range: A multiplier that adjusts the distance of the fast range from the price; higher values result in fewer, more lagging signals.
• Slow Period: Sets the lookback period for the slow range calculation.
• Slow Range: A multiplier that adjusts the distance of the slow range from the price; increasing this widens the filter gap.

FAQ

How do I adjust the indicator to be more sensitive? To increase sensitivity and receive more signals, you can decrease the "Fast Range" or "Slow Range" multipliers. This moves the filter line closer to the price action.

Can this indicator be used for scalping? Yes, by lowering the period settings (Fast and Slow periods) and the range multipliers, the indicator becomes more responsive to short-term price fluctuations.

How can I access the Twin Range Filter Visualized? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.