Volatilidad (COCIENTE close) 14/90 + Zonas

📊 Volatility (CLOSE RATIO) 14/90 + Zones

This indicator measures relative market volatility by comparing the daily price range to the daily closing price, and then evaluating that value against its historical behavior over short-term (14) and medium-term (90) periods.

Unlike traditional volatility approaches based solely on the High–Low range, this indicator introduces a close-normalized ratio, providing a more realistic and comparable volatility measure across assets with different prices or trading regimes.

🔍 Calculation Methodology


SMA 14 → short-term reference

SMA 90 → medium-term reference

Normalized Volatility

Volatility 14 = (Ratio / SMA14) × 100

Volatility 90 = (Ratio / SMA90) × 100

These two curves show whether current volatility is below, near, or above its historical norm.

🎨 Color Zones (Market Context)

The background color dynamically reflects volatility conditions, allowing immediate visual interpretation:

🟢 Green – Low volatility / stable environment

🟡 Yellow – Moderate volatility

🟠 Orange – High volatility

🟤 Brown – Very high volatility / caution zone

🔴 Red – Extreme volatility / elevated risk

The zones can be calculated using either the 14-period or 90-period volatility, depending on user preference.

📈 Practical Interpretation

Low volatility (green/yellow):
Favorable environment for trend-following strategies and structured entries.

Rising volatility (orange/brown):
Increased risk, potential breakouts, or exhaustion phases.

Extreme volatility (red):
Unstable market conditions, prone to sharp reversals, whipsaws, and emotional price action.

This indicator does not generate entry or exit signals. It is designed as a context and risk filter, helping traders decide when to trade and when to stay out.