Name: VolatilityDivergenceRedGreen by STTA - Underlying and implied volatiliy normally show negative correlated behavior (price rises, vola falls and vice versa) - This study shows symbols in on candles in chart where Undelying and corresponding vola index show same bahvior for 1,2 or 3 consecutive bars. (price rises and vola rises and vice versa) - This situation is called Vola Divergence. Red, when prices and vola fall; green, when price and vola rise - This information can be used to detect possible end of Up/Down-Swings. - User can configure if rising or falling or both price movements shall be displayed. - This study can be used with root symbols, which provide corresponding volatility indices. - supported Root Symbols: SPX, NDQ, DJI, RUT, CL, XLE, GC, SI, EUR, HSI, FXI, EWZ, AMZN, AAPL, GS, GOOG, IBM, DEU40 - in all other symbols, no symbols are displayed.
Inputs - underlying displayed in chart
Settings/Parameter - each Divergence can be switched off/on separately - output of each displayed symbol can be configured
Outputs - RedDiv1: first bar with rising price and rising volatility index - GreenDiv1: first bar with falling price and falling volatility index - RedDiv2: second bar in a row with rising price and rising volatility index - GreenDiv2: second bar with falling price and falling volatility index - RedDiv3: third bar in a row with rising price and rising volatility index - GreenDiv3: third bar in a row with falling price and falling volatility index
Cool! Had same idea, was thinking to do moving average divergence between ticker and volatility as not overlay indicator with *- to correlate moving average of say spy and uvxy. Will get to it at some point :) and yes there is definitely correlation there.
Trading-Software-Consulting
⋅
@redlinesd, Hi! Wish you a great day. Thank you very much for your comment and your fantastic idea with the MA. I will work on a Version2, where user can confure a MA and select, if signals shall be calculated on original symbols or MAs. If you know additional root symbols or vola indices, please let me know, then I can add to this indicator. I like this community for the inspiring inputs.