Price Extension from 8 EMA

Overview
This indicator can be used to see how far away the price is from the 8 EMA. It compares this to the Average Daily Range % to see if the stock may be overextended. The "Extension Multiplier" represents how far the stock is extended away from the 8 EMA.

Core Concept
This indicator is best used for breakout trades that are trying to make sure they are not chasing the stock.

How to Use This Indicator
This tool is primarily intended for analyzing daily charts of individual stocks and is often used by breakout traders to evaluate potential entry areas.

If the stock is far away from the 8 EMA, it is likely not ready to break out. If it is close to the 8ema, it could be ready to move higher.

This indicator can also be used in the opposite way. For example, shorting or puts.

Understanding the colors
Green (Not Extended): Indicates the price is close to the 8 EMA. This often corresponds to periods of consolidation.

Yellow (Slightly Extended): The price is beginning to move away from the 8 EMA.

Orange (Extended): The price has moved a considerable distance from the 8 EMA.

Red (Very Extended): The price is at an extreme distance from the 8 EMA, historically increasing the likelihood of a pullback or consolidation.

Settings
Info Row Position: Adjusts the vertical position of the display table on the chart. Useful when using other indicators.

ADR Length: Sets the lookback period for calculating the Average Daily Range. Or the average range % for different timeframes.

Timeframe: Determines the timeframe for the EMA and ADR calculation (the default is Daily).