Damiani Volatmeter [loxx]

2022年9月4日

I wasn't going to publish this since it's one my go to private indicators, but I decided to push this out anyway. This is a variation on Damiani Volatmeter to make it easier to understand what's going on. Damiani Volatmeter uses ATR and Standard deviation to tease out ticker volatility so you can better understand when it's the ideal time to trade. The idea here is that you only take trades when volatility is high so this indicator is to be coupled with various other indicators to validate the other indicator's signals. This is also useful for detecting crabbing and chopping markets.

Shoutout to user xinolia for the DV function used here.

Anything red means that volatility is low. Remember volatility doesn't have a direction. Anything green means volatility high despite the direction of price. The core signal line here is the green and red line that dips below two while threshold lines to "recharge". Maximum recharge happen when the core signal line shows a yellow ping. Soon after one or many yellow pings you should expect a massive upthrust of volatility. The idea here is you don't trade unless volatility is rising or green. This means that the Volatmeter has to dip into the recharge zone, recharge and then spike upward. You can also attempt to buy or sell reversals with confluence indicators when volatility is in the recharge zone, but I wouldn't recommend this. However, if you so choose to do this, then use the following indicator for confluence.

And last reminder, volatility doesn't have a direction! Red doesn't mean short, and green doesn't mean long, Red means don't trade period regardless of direction long/short, and green means trade no matter the direction long/short. This means you'll have to add an indicator that does show direction such as a mean reversion indicator like Fisher Transform or a Gaussian Filter. You can search my public scripts for various Fisher Transform and Gaussian Filter indicators.

Price-Filtered Spearman Rank Correl. w/ Floating Levels [Loxx] is considered the Mercedes Benz of reversal indcators

How signals work
RV = Rising Volatility
VD = Volatility Dump

Plots
White line is signal
Thick red/green line is the Volatmeter line
The dotted lower lines are the zero line and minimum recharging line

Included

• Bar coloring
  
• Alerts
  
• Signals
  

Related indicators

Variety Moving Average Waddah Attar Explosion (WAE) [Loxx]

2022年9月4日

版本注释

Comparing to GARCH
Generalized AutoRegressive Conditional Heteroskedasticity (GARCH) is a statistical model used in analyzing time-series data where the variance error is believed to be serially autocorrelated. GARCH models assume that the variance of the error term follows an autoregressive moving average process.