Congestion Index - MetaTrader 5 Script | Forex Indicator Download - MT4/MT5 Resources - MetaTrader 5 Resources

Description from Markos Katsanos’ book (Cross Market Trading Strategies):

An old problem with many trading systems is their inability to determine whether a trending market or a trading range market is imminent. Trend-following indicators such as MACD or moving averages tend to experience volatility when the market enters a phase of non-trend congestion. On the other hand, oscillators (which work well in trading range markets) often make it too early to buy or sell in trending markets. Therefore, identifying the market stage and choosing appropriate indicators are crucial to the success of the system. The Congestion Index attempts to identify the characteristics of a market by dividing the actual percentage of market change over the past x days by the extreme range.

Unlike similar indicators such as the Vertical Horizontal Filter (VHF) or Wilder's ADX, the Congestion Index is directional for the following reasons:

Attachment download

📎congestion_index.mq5 (10.09 KB)

Source: MQL5 #20431