This script shows three different calculations for volatility.
All three can be used as Stop-Loss... - Absolute Price Changes - Maximum Price Fluctuation - and every one should know Average True Range
The script has a dark and light theme. And the colors can be changed and each can be deactivated.
On top of that I stumbled over the fact that when MPF crosses over APC this could result in a significant change in price and could also be used as an entry or exit. This is also highlighted by default. You can change its background color and you can deactivate it too.
ACP measures volatility over most recent close prices. This is excellent for comparing volatility. It includes both frequency and magnitude. In other words: Sum of differences between second to last close price and last close price as absolute value for 'n' bars.
MPF measures volatility over most recent candles, which could be used as an estimate of risk. It may also be effective as the basis for a stop-loss or take-profit, like the ATR but it ignores the frequency of directional changes within the time interval. In other words: The difference between the highest high and lowest low over 'n' bars.
When you don't know what the ATR is then you can look at this link.
this is wonderful indicator, can it use on the index products and can you recommend the settings on 5 mins chart please?
weak_hand
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@lukricky, tyvm. I appreciate that very much. I would stay with the default 14 setting, cause every one uses atr14.
lukricky
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@weak_hand, i find the color of mpf > apc cross will change , is it mean more brighter color a lot greater mpf bigger than APC ? by the way, if i set 12 or even 11 of the length , i find more signals coming out which i dont look at the ATR at all, thanks so much
weak_hand
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@lukricky, longer instead of bigger/greater. Meaning: the MPF stayed above APC for a longer period.
lukricky
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@weak_hand, MPF stayed above APC means stronger trend going ?
weak_hand
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@lukricky, I can't confirm this ... look at the picture at the top. 7:45 to 10:00 seems huge and then it changed course. On 15:00 you have one candle and after that the trend is still going. One thing is for sure, markets are random xD
lukricky
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@weak_hand, i find only vix and Volatility will truely reflect the most updated market info at that moment, the rest indicators just tell the existing situation but no effective forcasting
@weak_hand, have you try to combine the william's vix with your volatility ? i find if MPF is greater than APC, it may a trigger signal to create entry or exit signal
weak_hand
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@lukricky, sorry, atm I have to many things to do. I will look into future prediction of volatility (vix) at some point in the future. Thanks for the advice.