Volatility Explosive Measure V0
Jul 24, 2016
The Volatility Explosive Measure V0 indicator measures the cumulative directional movement of price sequences to help traders identify market squeezes and explosive volatility breakouts.
Usage
The indicator displays a width value based on the difference between bullish and bearish sequences. Traders can use the area plot to gauge the current volatility environment:
- Crossovers above 0: Suggests that bullish price sequences are gaining momentum over bearish ones, often signaling the start of an upward explosive move.
- Crossunders below 0: Suggests that bearish price sequences are dominant, potentially indicating a downward breakout.
- Narrow range near 0: This typically represents a market "squeeze" or consolidation phase where volatility is low, often preceding a significant price expansion.
Details
The script calculates directional momentum by tracking consecutive bars of the same type (up bars or down bars).
- Sequence Logic: It identifies strings of bullish or bearish closes. For a bullish sequence, it sums the range (close - open) of consecutive up bars. Dojis are treated as continuing the previous direction.
- Smoothing: An Exponential Moving Average (EMA) is applied to these cumulative sequences to filter out minor noise.
- Width Calculation: The final output is the difference between the smoothed bullish sequence value and the smoothed bearish sequence value.
Settings
- Length: The lookback period used for the Exponential Moving Average (EMA) applied to the bullish and bearish sequences. A higher value results in a smoother, slower-reacting indicator, while a lower value makes it more sensitive to immediate price changes.
FAQ
How do I interpret the zero line?
The zero line represents the equilibrium between bullish and bearish momentum sequences. Values far from zero indicate high volatility in a specific direction.
Can this be used for trend reversal detection?
While primarily designed for volatility and breakouts, extreme readings followed by a return toward zero can sometimes signal the exhaustion of a specific trend.
How can I access Volatility Explosive Measure V0?
You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.
Trading & investing are risky and many will lose money in connection with trading and investing activities. All content on this site is not intended to, and should not be, construed as financial advice. Decisions to buy, sell, hold or trade in securities, commodities and other investments involve risk and are best made based on the advice of qualified financial professionals. Past performance does not guarantee future results.
Hypothetical or Simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, including, but not limited to, lack of liquidity. Simulated trading programs in general are designed with the benefit of hindsight, and are based on historical information. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown.
Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success.
As a provider of technical analysis tools and strategies, we do not have access to the personal trading accounts or brokerage statements of our customers. As a result, we have no reason to believe our customers perform better or worse than traders as a whole based on any content, tool, or platform feature we provide.
Charts used on this site are by TradingView in which the majority of our technical indicators are built on. TradingView® is a registered trademark of TradingView, Inc. www.TradingView.com TradingView® has no affiliation with the owner, developer, or provider of the Services described herein.
Market data is provided by CBOE, CME Group, BarChart, Massive, CoinAPI. Select U.S. equities data is provided through Massive. CBOE BZX real-time U.S. equities data is licensed from CBOE and provided through BarChart. Real-time futures data is licensed from CME Group and provided through BarChart. Select cryptocurrency data, including major coins, is provided through CoinAPI. All data is provided “as is” and should be verified independently for trading purposes.
This does not represent our full Disclaimer. Please read our full disclaimer.
© 2026 LuxAlgo Global, LLC.