CapitalFlowResearch: N-ATR

CapitalFlowsResearch: N-ATR — Normalised Volatility Regime Indicator

CapitalFlowsResearch: N-ATR transforms ATR into a normalised, directional volatility signal that oscillates within a fixed range. Instead of treating ATR as an absolute number—which varies widely across assets and market regimes—the tool rescales volatility into a consistent framework, allowing traders to compare conditions across instruments and timeframes without recalibrating settings.

The indicator identifies two core attributes simultaneously:

Volatility level relative to its recent environment
By normalising ATR, the script shows whether current volatility is high or low relative to its own historical context, not in arbitrary terms.

The direction of volatility pressure
A smoothing layer helps determine whether volatility is rising or falling, enabling a four-state volatility map (high → rising, high → falling, low → rising, low → falling).
These states are displayed via subtle background shading, giving a clear view of shifts in volatility regime without cluttering the chart.

A color-coded line plots the smoothed volatility signal itself, making transitions easy to spot and track over time.

Together, these features turn N-ATR into an effective volatility-regime compass—highlighting periods of compression, expansion, and volatility trend changes that often precede important market behaviour—while preserving the confidentiality of the underlying calculations.