Spread/Range Oscillator + Signal + Histogram

The Spread/Range Oscillator is a technical analysis tool designed to assess market momentum by evaluating the relationship between price movement and volatility.

Calculation
Spread: The difference between the closing and opening prices of a candle (close - open).

Range: The difference between the high and low prices of a candle (high - low).

Oscillator: The spread divided by the range (spread / range). This ratio provides a normalized measure of price movement within each candle.

Smoothed Oscillator: An Exponential Moving Average (EMA) applied to the oscillator over a user-defined period (Smoothing Length) to reduce noise.

Signal Line: An EMA of the Smoothed Oscillator over another user-defined period (Signal Line Length) to identify potential trend changes.

Histogram: The difference between the Smoothed Oscillator and the Signal Line (Smoothed Oscillator - Signal Line). Positive values suggest bullish momentum, while negative values indicate bearish momentum.

Inputs
Smoothing Length (EMA): Determines the period for smoothing the oscillator.

Signal Line Length (EMA): Sets the period for the EMA applied to the Smoothed Oscillator to generate the Signal Line.

Visual Representation
Smoothed Oscillator: Plotted as a line representing the smoothed momentum of price movements.

Signal Line: Displayed as a line serving as a reference to identify potential crossovers and trend changes.

Histogram: Rendered as bars, with positive values indicating bullish momentum and negative values indicating bearish momentum.

Zero Line: A horizontal line at zero to distinguish between bullish and bearish territories.

Applications
Momentum Analysis: Identify periods of strong buying or selling pressure based on the oscillator's position relative to the zero line.

Trend Confirmation: Use crossovers between the Smoothed Oscillator and Signal Line to confirm potential trend reversals or continuations.

Divergence Detection: Spot divergences between price action and the oscillator to anticipate possible market turning points.

This indicator is open-source and intended for educational purposes. It is recommended to use it in conjunction with other forms of analysis and risk management practices before making trading decisions.