IU Price Density(Market Noise)

30 нояб.

This Price density Indicator will help you understand what and how market noise is calculated and treated.

Market noise = when the market is moving up and down without any clear direction

The Price Density Indicator is a technical analysis tool used to measure the concentration or "density" of price movements within a specific range. It helps traders differentiate between noisy, choppy markets and trending ones.

I’ve developed a custom Pine Script indicator, "IU Price Density," designed to help traders distinguish between noisy, indecisive markets and clear trading opportunities. It can be applied across multiple markets.

How this work:

Formula = (Σ (High𝑖 - Low𝑖)) / (Max(High) - Min(Low))
Where,
High𝑖 = the high price at the 𝑖 data point.
Low𝑖 = the low price at the 𝑖 data point.
Max(High) = highest price over the data set.
Max(Low) = Lowest price over the data set.

How to use it :
This indicator ranges from 0 to 10
Green(0-3) = Trending Market
Orange(3-6) = Market is normal
Red(6-10) = Noise market

💡 Key Features:

Dynamic Visuals: The indicator uses color-coded signals—green for trending markets and red for noisy, volatile conditions—making it easy to identify optimal trading periods at a glance.

Background Shading: With background colors highlighting significant market conditions, traders can quickly assess when to engage or avoid certain trades.

Customizable Parameters: The length and smoothing factors allow for flexibility in adapting the indicator to various assets and timeframes.

Whether you're a swing trader or an intraday strategist, this tool provides valuable insights to improve your market analysis. I’m excited to bring this indicator to the community!