this is a very simple and quite straightforward indicator. so far the simplest we've built.
on what it does in regard to current chart and timeframe it plots a. Open - Close as a percentage of the Open (we regard open as more relevant than close, for as you can use latest estimates in current candle) in daily change coloring (so one may have an idea if there is a trend or sideways move unfolding) b. High - Low as a percentage of the Open, so one may compare extreme moves with final ones in the period c. Volume as a percentage distance from its WMA200 (always this one, a way better reference for normalcy). (e. g. a positive value x means Volume is x% above its WMA200)
on what it means to the best of our imperfect and incomplete understanding, we believe that low volatility periods lead to high volatility periods, so one might want to enter the market in low volatility periods to enjoy wild rides afterwards. such a trade of course would be, for the sake of making sense, a long volatility one. the timing for entrance could be once that the volatility waves fades to chart minimums.
we're open to critics, suggestions and comments. best regards.
Versionshinweise
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chart update.
Versionshinweise
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summary of changes in this new version the bias of the volatility is expressed.
description of the changes in previous version the columns were plotted centered around zero. in current version they are centered around the open. as a consequence, one can easily verify - how the highs and the lows were relatively to the open and - how near the close was to either of them
importance of the change perhaps a combination of different timeframes of this indicator can help to further clarify whether or not a directional move is being established.
the 0 line is the open value of each candle. this is why greens are above it and reds below it. for as green candles close above the open and vice versa. also, one can measure how far from the open the high and low were. we hope this help you to get better insights with it. thank you very much.
@greenfield_br, I have one more question about the indicator please. Regarding the "Volume" white line. What does it mean when I see it falling to a "negative" territory i.e. under the center line? It happens even on a green bars. Like what is this intended to signal?
greenfield_br
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@vininull, that line is how the volume is in regard to its WMA200. so, negative prints mean volume below average and vice versa. anytime.
Hello, and thanks again for interesting indicator! May I ask what is approximate suggested use for it? I see that low volatility leads to high volatility, but it doesn't point to the direction of the move... Do you use it with combination with more indicators?
greenfield_br
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@vininull, i should have known better. hello, vininull. i intend to write an update with a more thoroughly explanation. but in short, it is better to enter in low volatility periods, for as your stoploss is shorter and thus your risk reward ratios (TKP-IN)/(STL-IN) are likely to be higher. since volatility is both ways; you soon will be stopped out or pocket your profit. this also accelerates the rate of return on your $. 1k$ per year is not the same as 1k$ per month, and it might be the same trade. :) hope to have helped meanwhile. best and success.