RAVI: Chande Range Action Verification Index

// Licensed under the Apache License, Version 2.0
// © mihakralj
//@version=6
indicator("RAVI: Chande Range Action Verification Index", "RAVI", overlay=false)

//@function Calculates Range Action Verification Index using short/long SMA divergence
//@param shortPeriod Lookback period for fast SMA (default: 7, ~10% of longPeriod)
//@param longPeriod Lookback period for slow SMA (default: 65, ~13 weeks daily)
//@returns RAVI value as absolute percentage divergence between short and long SMAs
//@references Tushar Chande, "Beyond Technical Analysis", Wiley, 2nd ed. (2001), pp. 66-70
//@optimized O(1) per bar via circular buffer running sums for both SMAs
ravi(simple int shortPeriod, simple int longPeriod) =>
    if shortPeriod <= 0
        runtime.error("Short period must be greater than 0")
    if longPeriod <= 0
        runtime.error("Long period must be greater than 0")
    if shortPeriod >= longPeriod
        runtime.error("Short period must be less than long period")

    // Circular buffer for short SMA (O(1) running sum)
    var array<float> shortBuf = array.new_float(shortPeriod, na)
    var int shortHead = 0
    var int shortFilled = 0
    var float shortSum = 0.0

    // Circular buffer for long SMA (O(1) running sum)
    var array<float> longBuf = array.new_float(longPeriod, na)
    var int longHead = 0
    var int longFilled = 0
    var float longSum = 0.0

    // Update short SMA buffer
    float oldShort = array.get(shortBuf, shortHead)
    if not na(oldShort)
        shortSum -= oldShort
    shortSum += close
    array.set(shortBuf, shortHead, close)
    shortFilled := math.min(shortFilled + 1, shortPeriod)
    shortHead := (shortHead + 1) % shortPeriod

    // Update long SMA buffer
    float oldLong = array.get(longBuf, longHead)
    if not na(oldLong)
        longSum -= oldLong
    longSum += close
    array.set(longBuf, longHead, close)
    longFilled := math.min(longFilled + 1, longPeriod)
    longHead := (longHead + 1) % longPeriod

    float result = na

    if shortFilled >= shortPeriod and longFilled >= longPeriod
        // Step 1: Compute short-period SMA
        float smaShort = shortSum / shortPeriod

        // Step 2: Compute long-period SMA
        float smaLong = longSum / longPeriod

        // Step 3: RAVI = |SMA(short) - SMA(long)| / SMA(long) * 100
        // Guard against division by zero (long SMA at zero)
        if math.abs(smaLong) > 1e-10
            result := math.abs(smaShort - smaLong) / math.abs(smaLong) * 100.0

    result

// ---------- Main loop ----------

// Inputs
i_short = input.int(7, "Short Period", minval=1, maxval=100, tooltip="Fast SMA period (~10% of long period; Chande default: 7)")
i_long = input.int(65, "Long Period", minval=2, maxval=500, tooltip="Slow SMA period (~13 weeks daily; Chande default: 65)")
i_threshold = input.float(3.0, "Threshold", minval=0.0, maxval=20.0, step=0.5, tooltip="Trend/range classification level (Chande default: 3%)")

// Calculation
ravi_value = ravi(i_short, i_long)

// Plot
plot(ravi_value, "RAVI", color=color.yellow, linewidth=2)
hline(i_threshold, "Threshold", color=color.new(color.red, 50), linestyle=hline.style_dashed)
hline(0, "Zero Line", color=color.new(color.gray, 70), linestyle=hline.style_dotted)