This is a volatility indicator created by extending concepts from Tushar Chande's Range Action Verification Index (RAVI).
█ CONCEPTS
This indicator constructs range of the RAVI indicator. It uses this range to build a histogram that represents how fast the range is changing, or a measure of volatility. A line is then constructed, either from a moving average or standard deviation depending on the settings that can serve as an action trigger.
█ INPUTS
• Fast MA Period: the period of the quickest moving average that is used to build the RAVI indicator line • Slow MA Period: the period of the slowest moving average that is used to build the RAVI indicator line • MA Type: the type of moving average to use, either Simple or Exponential • Price Source: the type of price source to use; close, high, low, hlc3, etc. • Lookback Period: how far back to construct the minimum and maximum of the range • Standard Range: the standard range of the indicator. a smaller range will exaggerate differences in the columns, and vice-versa • Volatility Period: the period used for the trigger line moving average • Std. Deviation Mode?: Whether the trigger line will plot using a moving average or a multiple of Standard Deviation. • Deviation Multiplier: How many deviations to use if the trigger line is in Std. Deviation Mode
Thanks - just to be clear- when histogram breaks the MA (redline) we see volatility increase - histo under MA is choppy. - is that correct way to use this indicator ?
jwammo12
⋅
@vedantani, I would describe it more like the when the histogram breaks the MA its an indication that directional volatility has increased, indicating a possible breakout trend.
burgercrisis
⋅
Looks to be one of the better, more reliable volatility indicators! Amazing! Lots of the popular ones seem to spit so many false signals! Great work!
@RobVdNico, Hey, thanks. These are multipliers that scale the values of the histogram. This is so you can tweak the value range to your preference, if you would also like triggers when the histogram is above .8, for example.