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Multi Time Frame Composite Bands

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Multi Time Frame Composite Bands utilizes Fibonacci numbers (5, 8, 13, 21, 34) as period lengths for calculations. The indicator calculates a composite high line (C_high) by averaging the highest prices over Fibonacci periods, incorporating moving averages (SMA) of high prices for added refinement and smoothing. Similarly, a composite low line (C_low) is calculated by averaging the lowest prices with moving averages of low prices. The midline, obtained from the mean of C_high and C_low.

This band can function as volatility bands unlike traditional volatility indicators like Bollinger Bands , ATR bands it does not use traditional measures of volatility such standard deviation , ATR. This hugs closely to the price and during trending markets the some part of the candles stay outside the band and when the entire candle digress outside the band a price correction or reversal can be anticipated. This can be considered as a smoothed Donchian channel.

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The "Advanced Multi Time Frame Composite Bands" indicator is a technical analysis tool designed to provide insights into price volatility and potential support/resistance levels. This indicator is based on the concept of utilizing Fibonacci numbers (5, 8, 13, 21, 34) as period lengths for calculations. Here's a breakdown of how the indicator works:

Calculation of Volume-Adjusted Volatility (IDV):
The indicator starts by calculating the Intraday Volatility (IDV) as the range between the daily high and low prices divided by the closing price. This aims to capture the intraday price movement and volatility.

Average Volume-Adjusted Volatility (Ave_Nor_IDV):
The indicator then calculates the average volatility over a longer period (2000 bars) using the Simple Moving Average (SMA) of the previously calculated IDV. This average provides a average representation of historically observed volatility.

Composite High Line (high_c):
The indicator constructs the Composite High Line by taking the average of the highest prices over Fibonacci periods (5, 8, 13, 21, 34). Additionally, it includes the SMA of high prices over the periods 5, 8, and 13 to refine and smooth the Composite High Line.

Composite Low Line (low_c):
Similarly, the Composite Low Line is constructed by averaging the lowest prices over Fibonacci periods (5, 8, 13, 21, 34) and incorporating the SMA of low prices over the periods 5, 8, and 13.

Upper and lower bands C_high and C_low:
This is calculated by incorporating a buffer cushion to the composite high line (high_c) and composite low line (low_c) by using the average historic intraday volatility (IDV).

Midline (Basis):
The midline of the bands is calculated by taking the mean of the Composite High Line (C_high) and the Composite Low Line (C_low). This midline represents a point of equilibrium between the upper and lower bands.

Functionality and Interpretation:
This indicator serves as volatility bands and dynamic support/resistance levels. Unlike traditional volatility indicators like Bollinger Bands that use standard deviation, this indicator calculates the bands based on averages of highest, lowest, high and low price over multiple time frames. The indicator closely hugs the price, and during trends, candles might extend beyond the bands. When an entire candle moves outside the band, it suggests a potential price correction or reversal.

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updated the plot screen

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Updated coloring scheme for the mid line for easier trend visualization - Green up trend and Red down trend

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Chart correction on the screen.