ATR MOVEMENT CONCENTRATION Trading Guide

ATR Movement Concentration shows whether movement is concentrated in a few large price steps or distributed across many steps. By default, it compares the three largest steps in a window of 20 closed candles with the other 17. Both lines are measured in ATR; upward and downward steps have the same weight.

What does the indicator show?

• Gold solid line: the sum of the K largest absolute close-to-close steps, in ATR.
• Blue dashed line: the sum of all remaining steps in the same window, in ATR.
• Total Path (ATR): the sum of the two lines, available in the tooltip.
• Top K Share (0..1): the gold line divided by total path, also available in the tooltip. This is a movement-concentration ratio.

The selected steps can occur anywhere in the window; they do not have to be consecutive. Both lines use EMA3 by default. Set smoothing to 1 for direct rolling-window sums.

Example without smoothing: the three largest steps contribute 8 ATR and the other 17 contribute 2 ATR. Gold is 8, blue is 2, and Top K Share is 0.8: most movement came from three steps. With 20 equal steps of 0.5 ATR, gold is 1.5, blue is 8.5, and the share is 0.15.

At the default settings, gold above blue means that three steps contributed more movement than the other 17 combined. Compare both lines and their share: a high gold value alone can also reflect a generally active market. If K exceeds half the window, gold can be higher even when all steps are equal.

How is it calculated?

Each closed step is abs(close[j] - close[j-1]) / ATR[j-1]. ATR uses Wilder smoothing, period 14 by default. The denominator is fixed before the step; the current candle and later volatility cannot rescale its stored size.

The K largest normalized steps form the gold sum; all others form the blue sum. This is cumulative absolute path in individual pre-step ATR units, not net displacement from the start to the end of the window. Opposite steps both add to the path. A gap between closes counts even if the candle body is zero. Wicks affect ATR but do not add movement when closing prices are unchanged; volume is not used.

The value on candle i uses the window ending at i-1. The forming candle does not change published values. Values are actual ATR units with an automatic vertical scale; no 0-100 compression is applied.

Key Settings

• ATR Period (14): volatility-estimation period for each step.
• Movement Window (Closed Bars) (20): number of measured steps in the comparison window.
• Largest Steps (Top K) (3): number of strongest steps assigned to the gold group. K is capped at window size minus one.
• Line Smoothing (EMA) (3): smoothing for both sums. Set 1 to disable it.
• Show Other Steps (enabled): display the blue comparison line.

How to use Strategy Parameters (Condition Source)

All condition sources are numeric. Concentration itself has no bullish or bearish direction and emits no entry signals.

Smoothed path and concentration

• topAtr / Top K Movement (ATR): the gold sum after smoothing.
• otherAtr / Other Steps Movement (ATR): the blue sum after smoothing.
• totalAtr / Total Path (ATR): topAtr + otherAtr.
• topShare / Top K Share (0..1): topAtr / totalAtr, or blank when the path is zero.

Strategy Example: topAtr > otherAtr at the default settings selects periods where three steps dominate the remaining 17 combined. Alternatively, topShare > 0.6 selects a higher concentration ratio. An ATR condition such as totalAtr > 5 can require a minimum amount of activity. These thresholds are configurable descriptive filters, not tested entry rules.

Direct sums before smoothing

• topRaw, otherRaw and totalRaw: the original rolling-window ATR sums.
• topShareRaw: topRaw / totalRaw, or blank when no movement occurred.

Strategy Example: use topShareRaw > 0.6 to evaluate the actual current window without the EMA history included in the displayed lines. After smoothing, the line ratio can differ from this direct ratio.

Window context

• uniformShare / Equal Steps Share (0..1): K divided by window size, equal to 0.15 with the default settings.
• windowBars / Valid Steps In Window: number of valid steps currently accumulated.
• topBars / Top K: the effective configured K after parameter limits.

Strategy Example: topShare > uniformShare compares movement concentration with the equal-step baseline. With the default window, windowBars >= 20 confirms that a complete window is available. An unequal-step window generally exceeds the baseline, so this comparison alone is not a strong selection filter.

Reading zero and missing values

When ATR is positive but closes have not changed, both lines are zero and the concentration ratio is blank. Insufficient history or zero ATR produces blank measurements. Invalid OHLC data resets ATR and the window: with default settings, 14 valid candles and then 20 measured steps are needed again.

A concentrated path can come from a move in either direction or from opposite spikes. Its concentration alone does not establish trend direction or predict the next price move.