# Jump Detection

Jump Detection standardizes each bar's log return against a robust volatility benchmark - Bipower Variation over a 20-bar lookback by default - and flags one-bar dislocations that clear a 3-sigma threshold. Jump markers, on-chart labels and a variance-decomposition dashboard separate jump risk from ordinary volatility for traders sizing stops and bands.

- Indicator in the LuxAlgo Library, by LuxAlgo, published Jun 22, 2026.
- Access: free.
- Concepts: [Jump Detection](https://www.luxalgo.com/library/concept/jump-detection/) (primary)
- Open on Vela: https://vela.luxalgo.com/chart?pineScriptCodeId=yhmx71upzfr0hhf5jubcmp15
- Page: https://www.luxalgo.com/library/indicator/jump-detection/

**Jump Detection** is the definitive clean build of [jump detection](https://www.luxalgo.com/library/concept/jump-detection/) for everyday charts: each bar's log return is divided by a robust estimate of ordinary volatility and plotted as a Standardized Return in sigma units against dashed lines at ±3σ. Bars clearing it print Jump Markers and optional price-chart labels, and a dashboard splits recent variance into continuous and jump-driven parts.

## How to Trade the Jump Detection?

- **Reading beyond ±3σ**: the bar repriced beyond what its trailing benchmark calls ordinary - volatility estimates, band tags and stops spanning it deserve separate treatment.
- **Gap Jump alert**: the open itself repriced beyond the threshold from the prior close, so price skipped the levels between - where a stop could not have filled.
- **Jump Share of Variance climbing**: the dashboard shows variance arriving in lurches rather than steady churn.

An isolated dislocation stands out sharply while a sustained stretch of large bars lifts the benchmark and stops being flagged. Four alerts cover up, down, either-direction and gap jumps - useful pause triggers for the [volatility toolkit](https://www.luxalgo.com/library/family/volatility/).

## Jump Detection Settings

- **Volatility Lookback** (default 20): trailing bars behind the benchmark, ending on the prior bar so the tested bar never inflates its own yardstick.
- **Volatility Estimator** (default Bipower Variation): the robust scale for standardizing; Median Absolute Deviation and Standard Deviation are the alternatives.
- **Jump Threshold (σ)** (default 3): sigma multiple a return must exceed; raise toward 4-5 on noisy intraday data.
- **Mark Jumps on Chart** (default on): labels jumps on the price chart with magnitudes.
- **Show Dashboard** (default on): the variance-decomposition panel.
- **Gradient Fill** (default on): style toggle for the zero-to-value fill.

## Frequently Asked Questions

### How is a jump different from range expansion?

A jump is a single bar out of line with its surroundings; expansion is a persistent run of larger bars, which lifts the robust benchmark and stops flagging. [ATR Expansion & Contraction](https://www.luxalgo.com/library/indicator/atr-expansion-contraction/) is the dedicated tool for that regime shift itself.

### Which volatility estimator should I choose?

Bipower Variation is the default because products of absolute adjacent returns barely react to one outsized bar. Median Absolute Deviation behaves similarly; Standard Deviation shows the failure mode: one jump inflates it for a full window, muting the detector after an event.

### Does the indicator predict jumps?

No - it identifies and measures them once the bar prints. The value is in treatment: cleaning volatility estimates and separating band tags that landed across a jump bar.

## Related indicators

- [Hot Zone Radar](https://www.luxalgo.com/library/indicator/hot-zone-radar/) (Volatility Percentile/rank): markdown at https://www.luxalgo.com/library/indicator/hot-zone-radar.md
- [Volatility Signature Plot](https://www.luxalgo.com/library/indicator/volatility-signature-plot/) (Volatility): markdown at https://www.luxalgo.com/library/indicator/volatility-signature-plot.md
- [The Range Indicator](https://www.luxalgo.com/library/indicator/the-range-indicator/) (Volatility): markdown at https://www.luxalgo.com/library/indicator/the-range-indicator.md
- [Volatility of Volatility](https://www.luxalgo.com/library/indicator/volatility-of-volatility/) (Volatility): markdown at https://www.luxalgo.com/library/indicator/volatility-of-volatility.md
- [Garman-Klass–Yang-Zhang Hybrid](https://www.luxalgo.com/library/indicator/garman-klass-yang-zhang-hybrid/) (Volatility): markdown at https://www.luxalgo.com/library/indicator/garman-klass-yang-zhang-hybrid.md
- [GARCH-family Clustering](https://www.luxalgo.com/library/indicator/garch-family-clustering/) (Volatility): markdown at https://www.luxalgo.com/library/indicator/garch-family-clustering.md
- [Kase Studies](https://www.luxalgo.com/library/indicator/kase-studies/) (Volatility): markdown at https://www.luxalgo.com/library/indicator/kase-studies.md
- [Yang-Zhang Estimator](https://www.luxalgo.com/library/indicator/yang-zhang-estimator/) (Volatility): markdown at https://www.luxalgo.com/library/indicator/yang-zhang-estimator.md

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Source: https://www.luxalgo.com/library/indicator/jump-detection/ (LuxAlgo Library). Free to use with attribution: https://www.luxalgo.com/library/license/