Custom Volatility Spike Detector

Overview

This custom indicator combines Bollinger Bands (standard deviation) and percentile analysis to statistically detect significant volatility spikes.

When a spike occurs, the background color of the corresponding bar automatically changes, allowing for instant recognition of market turbulence. Additionally, it can be used to draw support and resistance lines, improving entry and exit precision.

Features

✅ High-Precision Spike DetectionUtilizes Bollinger Bands (standard deviation) × percentile analysis to identify only reliable volatility spikes.

✅ Clear Visual AlertsWhen a spike occurs, the background color of the bar changes automatically!It doesn’t clutter the chart, allowing intuitive recognition of anomalies.

✅ Volume Filtering IncludedCuts out noise during low-volume periods, providing reliable signals.

✅ Simple DesignEliminates unnecessary labels and drawings, keeping the chart clean.

How the Indicator Works

1️⃣ Statistical AnalysisCalculates volatility over a specified period using both "standard deviation-based" and "percentile-based" methods to detect anomalies.

2️⃣ Volume FilteringRecognizes a spike only when the current volume exceeds the average or recent peak.

3️⃣ Auto-HighlightingWhen a valid spike occurs, the bar's background color changes automatically, enhancing visibility.

Use Cases

🔹 Identify Market Reversal PointsDetects sharp increases in volatility, spotting potential breakouts and trend reversals.

🔹 Enhance Risk ManagementQuickly recognizes market turbulence, helping to adjust positions and set stop losses.

🔹 Complementary Technical AnalysisCan be combined with other indicators to develop more precise trading strategies.

🔹 Support and Resistance Line AssistanceUses detected spikes as a reference to identify key price levels (support & resistance).

What Makes This Indicator Unique?

🔸 Incorporates a unique volume filter and algorithm in addition to standard volatility analysis, achieving high precision and reliability!🔸 Visually intuitive and capable of responding to market turbulence in real time!

Disclaimer

This indicator does not provide buy/sell signals but serves as a market analysis aid.

It is recommended to validate its effectiveness and use it alongside other analytical methods before applying it.

Use of this indicator is at the user's own risk.

Credit

This script is originally developed by PakunFX and is not a copy of any other indicator.

Summary

This volatility spike detection indicator visually captures market turbulence and helps improve trading accuracy.

🔹 Detect volatility spikes effectively!🔹 Remove noise with volume filtering!🔹 Intuitive and easy-to-use design!