Volatility Price Flow

Capitalize on market volatility with our new volatility price flow indicator. We have designed this indicator to process historical price movements and indicate when price may have reached exhaustion in the context of current volatility.

This is achieved by taking the price deviation from a user defined moving average, and applying a weighting to the deviations from the candle body and candle wick on both buy side and sell side, over a user defined period. The period of the base moving average, type of moving average and the period of the historical price deviations can all be modified. This creates a typical 'band' style indicator, though with a unique characteristic that the buy and sell side vary independently as well as the band expansion being based on weighted variables tied to the actual price changes, rather than just a standard deviation the moves uniformly.

Additionally, these bands can be merged with an anchored vwap - we do this so that the deviations of price from the moving average can include a more volume based approach to identifying potential pivots.

The end result is an indicator that reflects the current market price movements, identifies and capitalizes on impulsive or beginning moves to indicate potential tops / bottoms / reversals.

The signals are simple - anytime price closes within a band, having been outside the band, a signal is displayed. As a basic guide to setting the indicator up for the first time, we suggest reducing all of the multipliers to a value less than 1. Then gradually increase each one, until the signals reduce in quantity and improve in quality, starting with the price deviation multiplier, then the volatility multiplier and finally the expansion multiplier.

Last of all, alerts can be created based on the current chart timeframe and indicator settings, simply by adding an alert that uses the built in buy or sell signal.

Note: We cannot guarantee the accuracy of the signals provided, since the user creates the signals by modifying the settings, and as such we can take no responsibility for any trading losses incurred using the indicator and highly encourage all users to manage their risk and only risk what you can afford to lose.