Volumetric Volatility Blocks [UAlgo]

31. Juli

The Volumetric Volatility Blocks [UAlgo] indicator is designed to identify significant volatility blocks based on price and volume data. It utilizes a combination of the Average True Range (ATR) and Simple Moving Average (SMA) to determine the volatility level and identify periods of heightened market activity. The indicator highlights these volatility blocks, providing traders with visual cues for potential trading opportunities. It differentiates between bullish and bearish volatility by analyzing price movement and volume, offering a nuanced view of market sentiment. This tool is particularly useful for traders looking to capitalize on periods of high volatility and momentum shifts.



🔶 Key Features

Volatility Measurement Length: Controls the period used to calculate the ATR.

Smooth Length of Volatility: Defines the period for the SMA used to smooth the ATR.

Multiplier of SMA: Sets the minimum threshold for the ATR to be considered a "high volatility" block.

Show Last X Volatility Blocks: Determines how many of the most recent volatility blocks are displayed on the chart.

Mitigation Method: Choose between "Close" or "Wick" price to filter volatility blocks based on price action. This helps avoid highlighting blocks broken by the chosen price level.

Volume Info: Displaying the volume associated with each block.

Up/Down Block Color: Sets the color for bullish and bearish volatility blocks.

🔶 Usage

The Volumetric Volatility Blocks [UAlgo] indicator visually represents periods of high volatility with blocks on the chart. Green blocks indicate bullish volatility, while red blocks indicate bearish volatility.

Bullish Volatility Blocks: When the ATR surpasses the smoothed ATR multiplied by the set multiplier, and the price closes higher than it opened, a bullish block is formed. These blocks are generally used to identify potential buying opportunities as they indicate upward momentum.

Bearish Volatility Blocks: Conversely, bearish blocks form under the same conditions, but when the price closes lower than it opened. These blocks can signal potential selling opportunities as they highlight downward momentum.



Volume Information: Each block can display volume data, providing insight into the strength of the market movement. The percentage shown on the block indicates the relative volume contribution of that block, helping traders assess the significance of the volatility.



The volume percentages in the Volumetric Volatility Blocks [UAlgo] indicator are calculated based on the total volume of the most recent volatility blocks. For each of the most recent volatility blocks, the percentage of the total volume is calculated by dividing the block's volume by the total volume:



🔶 Disclaimer

Use with Caution: This indicator is provided for educational and informational purposes only and should not be considered as financial advice. Users should exercise caution and perform their own analysis before making trading decisions based on the indicator's signals.

Not Financial Advice: The information provided by this indicator does not constitute financial advice, and the creator (UAlgo) shall not be held responsible for any trading losses incurred as a result of using this indicator.

Backtesting Recommended: Traders are encouraged to backtest the indicator thoroughly on historical data before using it in live trading to assess its performance and suitability for their trading strategies.

Risk Management: Trading involves inherent risks, and users should implement proper risk management strategies, including but not limited to stop-loss orders and position sizing, to mitigate potential losses.

No Guarantees: The accuracy and reliability of the indicator's signals cannot be guaranteed, as they are based on historical price data and past performance may not be indicative of future results.