Adaptive 2-Pole Trend Bands [supfabio]

Adaptive 2-Pole Trend Bands is a volatility-aware trend filtering indicator designed to identify the dominant market direction while providing dynamic reference zones around price.

Instead of relying on traditional moving averages, this indicator uses a two-pole digital filter to smooth price action while maintaining responsiveness. Around this central trend line, a multi-band structure based on ATR is applied to help traders evaluate pullbacks, extensions, and potential exhaustion areas within a trend.

Core Concept

The indicator is built around three key ideas:

Digital Trend Filtering

Volatility-Adjusted Bands

Trend Persistence Measurement

These components work together to separate meaningful price movement from noise and to provide context for how far price has moved relative to recent volatility.

Two-Pole Trend Filter

At its core, the indicator uses a two-pole smoothing filter, which produces a cleaner trend curve than common moving averages.

Compared to standard averages, this approach:

Reduces market noise

Produces smoother transitions

Responds faster to genuine trend changes

Avoids excessive lag in trending markets

The result is a trend line that represents the structural direction of price, rather than short-term fluctuations.

Adaptive Multi-Band System

Around the central trend filter, the indicator plots four independent volatility-based bands, each derived from the Average True Range (ATR).

Each band represents a different degree of price extension:

Band 1: Shallow pullbacks and minor reactions

Band 2: Moderate extensions within a trend

Band 3: Strong directional moves

Band 4: Extreme extensions relative to recent volatility

Because the bands are ATR-based, they automatically adapt to changing market conditions, expanding during high volatility and contracting during calmer periods.

This makes the indicator suitable for both slow and fast markets without manual recalibration.

Trend State Detection

The color of the central filter dynamically reflects trend persistence, not just direction:

Sustained upward movement highlights bullish conditions

Sustained downward movement highlights bearish conditions

Transitional phases are visually distinct, helping identify regime changes

This logic is based on how long price has maintained directional behavior, reducing sensitivity to isolated candles or short-lived spikes.

Practical Applications

This indicator can be used as:

A trend filter for discretionary or systematic strategies

A context tool to evaluate pullbacks versus overextension

A risk reference to avoid entries in extreme price zones

A confirmation layer when combined with price action or momentum tools

It performs consistently across different asset classes, including futures, cryptocurrencies, forex, indices, and equities.

Configuration

Key parameters such as filter length, damping factor, and band multipliers are fully configurable, allowing traders to adapt the indicator to different timeframes and trading styles.

Important Notes

This indicator does not predict future price movement

It does not generate guaranteed buy or sell signals

Best results are achieved when used in combination with sound risk management and additional confirmation tools

Past behavior does not imply future performance

Disclaimer

This indicator is provided for educational and analytical purposes only and should not be considered financial advice.

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