Consolidation indicator

█ Overview
The "Consolidation Indicator" is a custom indicator for TradingView designed to identify consolidation periods in the price chart. Consolidation typically occurs when the price of an asset moves within a narrow range, and this indicator helps traders recognize such conditions. It can be a useful tool for traders looking to identify potential breakouts or periods of reduced volatility.

█ Indicator Settings
1 — Timeframe: This setting allows you to select the timeframe for which you want to analyze consolidation. You can choose from various timeframes available in TradingView.

2 — Price Smoothing Length: This parameter controls the smoothing of price data. You can adjust the value, with a minimum of 1, to control the level of smoothing applied to the price data.

3 — Average Range Length (range_len): This setting defines the length of the average range used in the calculation of the indicator. By default, it is set to 14.

4 — Threshold for Narrow Range (NR_threshold): The indicator will consider a price range as narrow if it falls below this threshold as a percentage of the average range. It is set to 80% by default.

5 — Consecutive Narrow Ranges for Consolidation: This parameter allows you to specify how many consecutive narrow price ranges are required to confirm a consolidation period. The default value is 3.

6 — Candle Color: You can choose the color for the consolidation candles. The default is a bright green color.

█ Indicator Output
The indicator visually displays consolidation and breakout periods on the price chart using colored candles and breakout icons.

• Candles: During a consolidation period, the indicator colorizes the candles in a specified color (default is green) with a transparency that decreases as the number of consecutive narrow ranges increases. This allows you to easily spot consolidation periods on the chart.

• Breakout Icons: The indicator also places a breakout icon (💥) below the price chart to indicate potential breakout opportunities. When a breakout condition is met, the icon appears with an orange color.

█ Alerts
The indicator provides two alert conditions:

1 — Consolidation Begins: This alert triggers when a consolidation period starts. It indicates that the price is moving within a narrow range compared to the average range.

2 — Breakout: This alert triggers when a potential breakout from the consolidation is detected.

█ How to Use
1 — Apply the "Consolidation Indicator" to your TradingView chart by adding it as a custom indicator.

2 — Customize the indicator settings based on your trading preferences, such as timeframe, smoothing length, and threshold for a narrow range.

3 — Monitor the chart for colored candles. The indicator will color candles to highlight consolidation periods.

4 — Look for the breakout icon (💥) below the chart, which indicates potential breakout opportunities.

5 — Set up alerts to be notified when a consolidation begins or a breakout is detected, helping you stay on top of potential trading opportunities.

Keep in mind that this indicator is a tool to assist in identifying consolidation periods, and it should be used in conjunction with other analysis methods for comprehensive trading decisions.

Versionshinweise:

Added breakout direction based on recent price action (hullma)