Median

Definition

The Median indicator is a tool that can be used to measure the market direction and volatility. It forms a channel based on how ATR deviates from the middle of the range. The indicator displays the median value of the average between high and low for the specified length. That median is compared to its EMA for the same length: the space between the median and its EMA is presented as a cloud colored according to which of the values is higher. The green cloud appears when the median is higher and indicates an uptrend, while the violet cloud signifies a downtrend. 

The indicator is enveloped by bands based on the Average True Range. To calculate the bands, an ATR value for a specified ATR length is multiplied by the ATR multiplier and then added to or subtracted from the median.

Inputs

Median Source

The data source based on which the median is calculated.

Median Length

The length of the median, i.e. how many data points of the Source are used when the median is calculated.

ATR Length

The time period to be used in calculating the Average True Range of the median.

ATR Multiplier

The value by which the ATR is multiplied before forming the bands.