prevHigh, prevLow, and prevClose are calculated to capture the high, low, and close of the previous day. This is used to understand the previous day's price range and sentiment. ATR Calculation:
The Average True Range (ATR) is a measure of volatility. We use it to estimate how much the price might move up or down from the previous close. Predicted High and Low:
Using the previous close plus and minus the ATR value gives a range where the price might reach. Predicted Target Price:
The script calculates a simple midpoint of the previous day's range to predict the target price for the next candle. This midpoint serves as a basic prediction, assuming price might oscillate within the previous day's range. Plotting:
The script plots the predicted high, low, and target price as well as the previous day's high, low, and close for context.