OPEN-SOURCE SCRIPT

ATR Extension [QuantVue]

The Moving Average ATR Extension Indicator offers a powerful blend of two key market elements: the Average True Range (ATR) and Moving Averages (MA), capturing the dynamics of market momentum and trend direction.

This indicator is used to measure market extension from a user-selected moving average based on multiples of the Average True Range (ATR). By doing this, it becomes remarkably straightforward to spot strength at breakout points or exhaustion near the end of a run.

As a market breaks out the extension indicates a surge in buying pressure, while an extension after a sizeable move can often be an indication of market exhaustion. This extended position essentially reflects over-enthusiastic buying and could be an early warning sign of a potential trend reversal.

Breakout Strength:
snapshot

Exhaustion:
snapshot

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ATRatrindicatorAverage True Range (ATR)breakoutexhaustionMoving Averagesquantvuestrength

Open-source script

In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in publication is governed by House rules. You can favorite it to use it on a chart.

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