% volatility
Nov 9, 2018
The % volatility indicator provides a quick and efficient way to scan assets based on their percentage price range, helping traders identify high-volatility environments suitable for strategies like AB-trading. By calculating the difference between the highest and lowest prices over a set period relative to the median price, it highlights assets currently experiencing significant price fluctuations.
Usage
The indicator is primarily used to identify periods where an asset's price range exceeds a specific percentage threshold. When the histogram rises above the shaded area, it signifies that the asset's volatility is higher than your defined minimum requirement. This is particularly useful for:
- Identifying coins or stocks with enough movement for day trading.
- Filtering out sideways or low-activity markets.
- Detecting sudden spikes in price range that may precede major trend shifts.
Details
The script calculates volatility by determining the difference between the highest high and the lowest low over a user-defined lookback period. This "delta" is then divided by the hl2 (the midpoint of the current bar's high and low) and multiplied by 100 to yield a percentage change value. This normalized approach allows for easier comparison across different assets regardless of their nominal price.
Settings
- lookback length: Sets the number of bars used to determine the highest and lowest prices for the volatility calculation.
- 1/10th % range threshold: Defines the volatility floor in tenths of a percent. For example, a setting of 10 represents a 1% volatility threshold.
FAQ
How do I interpret the histogram?
The histogram represents the current percentage volatility. If the bars are above the horizontal threshold area, the asset is currently more volatile than your specified minimum setting.
Can I set alerts for volatility changes?
Yes, the indicator includes built-in alerts that trigger when the percentage volatility crosses over or under your defined threshold.
How do I access the % volatility indicator?
You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.
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