Eze Profit Range Detection Filter

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The Range Detection Filter is a technical analysis tool designed to help traders identify range-bound market conditions and focus on breakout opportunities. It combines the ATR (Average True Range) for volatility analysis and the ADX (Average Directional Index) for trend strength evaluation to highlight consolidation phases and alert traders when the market is ready to break out.

This indicator provides visual cues and customizable alerts, making it suitable for traders looking to avoid false signals during choppy markets and capitalize on trending moves following a breakout.

What Makes It Unique?
ATR for Volatility:

Measures market volatility by comparing ATR with its moving average.
Consolidation phases are flagged when ATR remains below its moving average for a sustained period.

ADX for Trend Strength:

Monitors trend strength, confirming range-bound conditions when ADX falls below a user-defined threshold (default: 20).
Combines with ATR to ensure accurate detection of trendless periods.
Breakout Alerts:

Notifies traders of breakout opportunities when the price moves outside the highest high or lowest low of the range.
How It Works:
Range Detection:

The market is considered "in range" when:
ATR is below its moving average, indicating low volatility.
ADX is below the threshold, confirming a lack of trend strength.
Visual Indication:

A yellow background highlights range-bound conditions, allowing traders to avoid low-probability trades.
Breakout Detection:

Alerts are triggered for breakouts above or below the range to help traders identify potential opportunities.

Features:
Range Highlighting:

Automatically detects and highlights range-bound markets using a yellow background.
Breakout Alerts:

Sends alerts for breakouts above or below the range once the market exits consolidation.
Customizable Inputs:

ATR length, moving average length, and ADX parameters are fully adjustable to adapt to various trading styles and asset classes.
Multi-Timeframe Compatibility:

Suitable for all markets and timeframes, including stocks, forex, and cryptocurrencies.
How to Use:

Identify Ranges:

Avoid trading when the yellow background appears, signaling a range-bound market.
Focus on Breakouts:

Look for alerts indicating breakouts above or below the range for potential trending opportunities.
Combine with Other Indicators:

Use volume analysis, momentum oscillators, or candlestick patterns to confirm breakout signals.

Credits:
This script utilizes widely accepted methodologies for ATR and ADX calculations. ADX is calculated manually using directional movement (+DI and -DI) for precise trend detection. The concept has been adapted and enhanced to create this comprehensive range-detection tool.

Notes:
This indicator is intended for educational purposes and should not be used as standalone financial advice.
Always incorporate this tool into a broader trading strategy for optimal results.