Adaptive Volatility Bands | AlphaNatt

Adaptive Volatility Bands (AVB) | AlphaNatt

Professional-grade dynamic bands that adapt to market volatility and trend strength, featuring smooth gradient visualization for enhanced chart clarity.

🎯 CORE CONCEPT

AVB creates self-adjusting bands around a customizable basis line, expanding during trending markets and contracting during consolidation. The gradient fill provides instant visual feedback on price position within the volatility envelope.

✨ KEY FEATURES

• 5 Basis Types: Choose between SMA, EMA, ALMA, KAMA, or VWMA for the centerline calculation
  
• Adaptive Band Width: Bands automatically widen in strong trends and tighten in ranging markets
  
• Smooth Gradient Fills: 10-layer gradient on each side for professional depth visualization
  
• Multiple Volatility Metrics: ATR, Standard Deviation, or Range-based calculations
  
• Squeeze Detection: Identifies Bollinger/Keltner squeeze conditions for breakout anticipation
  
• Dynamic Color States: Cyan (#00F1FF) for bullish, Magenta (#FF019A) for bearish conditions
  

📊 HOW IT WORKS

1. The basis line is calculated using your selected moving average type
   
2. Volatility is measured using ATR, StDev, or Range
   
3. Trend strength is quantified via linear regression
   
4. Band width adapts based on normalized trend strength (when enabled)
   
5. Gradient layers create smooth visual transitions from bands to basis
   
6. Color state changes based on price position and basis direction
   

🔧 PARAMETER GROUPS

Basis Configuration:

• Basis Type: Moving average calculation method
  
• Basis Length (20): Period for centerline calculation
  
• ALMA Settings: Offset (0.85) and Sigma (6) for ALMA basis
  

Volatility Settings:

• Volatility Method: ATR, Standard Deviation, or Range
  
• Volatility Length (14): Lookback for volatility calculation
  
• Band Multiplier (2.0): Distance of bands from basis
  

Adaptive Settings:

• Enable Adaptive (true): Toggle dynamic band adjustment
  
• Adaptation Period (50): Trend strength measurement window
  

Squeeze Detection:

• BB/KC Parameters: Settings for squeeze identification
  
• Expansion Threshold: Multiplier for expansion signals
  

📈 TRADING SIGNALS

Long Conditions:

• Price crosses above basis
  
• Basis line is rising
  
• Band color shifts to cyan
  

Short Conditions:

• Price crosses below basis
  
• Basis line is falling
  
• Band color shifts to magenta
  

💡 USAGE STRATEGIES

1. Trend Following: Trade with the basis direction when bands are expanding
   
2. Mean Reversion: Fade moves to outer bands during squeeze conditions
   
3. Breakout Trading: Enter on expansion signals after squeeze periods
   
4. Support/Resistance: Use bands as dynamic S/R levels
   
5. Position Sizing: Wider bands suggest higher volatility - adjust size accordingly
   

🎨 VISUAL ELEMENTS

• Gradient Fills: 10 opacity layers creating smooth band transitions
  
• Dynamic Colors: State-dependent coloring for instant trend recognition
  
• Basis Line: Bold centerline changes color with trend state
  
• Band Lines: Outer boundaries with matching state colors
  

⚡ BEST PRACTICES

The AVB indicator works optimally on liquid instruments with consistent volume. The adaptive feature performs best in trending markets but can generate false signals during choppy conditions. Consider using alongside momentum indicators for confirmation. The gradient visualization helps identify price position within the volatility envelope at a glance.

🔔 ALERTS INCLUDED

• Long/Short Signals
  
• Squeeze Conditions
  
• Expansion Breakouts
  
• Band Touch Events
  

Version 6 | Pine Script™ | © AlphaNatt