Candle Spread + ATR SMA Analysis

This indicator combines elements from two popular open-source scripts — Candle Range Compare
by oldinvestor https://www.tradingview.com/script/6WSs256o-Candle-Range-Compare/
and Objective Analysis of Spread (VSA)
by Rin-Ninhttps://www.tradingview.com/script/2SYW2RFs-Objective-Analysis-of-Spread-VSA/
— into a single tool for analyzing candle spreads (ranges and bodies) in relation to volatility benchmarks.

🔎 What It Does

Candle Decomposition:

Plots total candle ranges (high–low) in gray, for both up and down closes.

Plots up-close bodies (open–close) in white.

Plots down-close bodies in black.

This makes it easy to spot whether volatility comes from real price movement (body) or extended wicks.

ATR & SMA Volatility Bands:

Calculates ATR (Average True Range) and overlays it as a black line.

Plots four volatility envelopes derived from the SMA of the true range:

0.8× (blue, shaded)

1.3× (green)

1.8× (red)

3.0× (purple)

Colored fill zones highlight when candle spreads are below, within, or above key thresholds.

Visual Context:

Track expansion/contraction in spreads.

Compare bullish (white) vs bearish (black) bodies to gauge buying/selling pressure.

Identify when candles stretch beyond typical volatility ranges.

📈 How To Use It

VSA context: Wide down bars (black) beyond ATR bands may suggest supply; wide up bars (white) may indicate demand.

Trend confirmation: Expanding ranges above average thresholds (green/red/purple bands) often confirm momentum.

Reversal potential: Small bodies but large ranges (gray + wicks) frequently appear at turning points.

Volatility filter: Use ATR bands to filter trades — e.g., only act when candle ranges exceed 1.3× or 1.8× SMA thresholds.

🙏 Credits

This script is inspired by and combines ideas from:

Candle Range Compare
by oldinvestor

Objective Analysis of Spread (VSA)
by Rin-Nin

Big thanks to both authors for their valuable contributions to the TradingView community.

One thing I couldnt quite get to work is being able to display up and down wicks like in the candle range compare, so I just add that indicator to the chart as well, uncheck everything but the wick plots and there it is.