Price Risk Assessment

Price Risk Assessment is a composite risk oscillator designed to gauge the probability of price exhaustion and reversal. Unlike standard oscillators that rely on a single data point, this indicator synthesizes five distinct market dimensions to create a holistic "Risk Score" ranging from 0 to 1.

This tool is designed to help traders identify when an asset is statistically overheated (High Risk) or undervalued (Low Risk) relative to its recent history.

🛠️ How It Works
The indicator calculates a raw risk score based on a weighted average of the following components:

Price Position: Measures where the current price sits relative to the High/Low range of the lookback period.

Momentum Risk: Analyzes the Rate of Change (ROC) to determine if velocity is reaching historical extremes.

Volatility Risk: Uses Average True Range (ATR) to assess if volatility is expanding to unsustainable levels.

Trend Strength: Utilizes a custom ADX calculation to factor in trend exhaustion.

Volume Intensity: Compares current volume against historical extremes to identify climax behavior.

🚀 Asset-Specific Algorithms Markets behave differently. This indicator includes a unique "Asset Type" input that dynamically adjusts the weight of the calculations above:

Crypto: Heavily weighted toward Volatility and Momentum.

Stocks: Balanced approach with higher emphasis on Trend Strength.

ETFs: Prioritizes Price Position and Trend stability.

🎯 How to Use
The indicator plots a line that changes color based on "Persistent Risk."

Buying Opportunities (Low Risk):

Purple (Very Low Risk < 0.20): Extreme oversold conditions. historically strong accumulation zones.

Lime (Low Risk < 0.35): Price is in a value area.

Signal: Look for the line to turn Lime or Purple. This suggests downside momentum is fading.

Selling/Hedging Opportunities (High Risk):

Red (Very High Risk > 0.80): Extreme overbought conditions. High probability of a correction.

Orange (High Risk > 0.65): Price is entering a danger zone.

Signal: Look for the line to turn Orange or Red. This suggests the move is overextended.

The "Persistence" Filter To avoid fake-outs during strong trends, this script uses a Persistence Period setting. The risk level must remain in a zone for a specific number of bars (default: 3) before the color changes. This filters out momentary spikes and focuses on sustained market stress.

⚙️ Settings
Asset Type: Choose between Crypto, Stock, or ETF to adjust the internal formula weights.

Lookback Period: The historical window for calculating relative extremes (Default: 100).

Smoothing: Applies an EMA to the final score to reduce noise.

Risk Thresholds: Manually adjust what constitutes "High" or "Low" risk.

Disclaimer: This tool is for information purposes only and does not constitute financial advice. Past performance is not indicative of future results.