Volatility Detector

The "Volatility Detection" indicator is a TradingView tool designed to help traders identify and visualize price volatility in any market. Built with Pine Script v6, this indicator uses a color-coded system to highlight volatility levels, overlaying them directly onto your candlestick chart for quick and intuitive analysis. It’s perfect for spotting calm periods or explosive price movements at a glance.

Key Features:
Volatility Tracking: Measures the intensity of price changes and presents it in a smoothed, digestible format.

Color-Coded Visualization:

• Assigns colors (green, yellow, orange, red) to reflect increasing volatility levels.
  
• Applies these colors to candlesticks, wicks, and borders, blending seamlessly with your price chart.
  
• Dual Metrics: Shows a histogram for raw volatility and a smoothed line for trend clarity.
  
• Customizable Settings: Offers adjustable inputs to tailor the indicator to your trading preferences.
  

How It Works:

• Tracks price fluctuations and processes them into a normalized volatility metric.
  
• Smooths the data to filter out noise and assigns colors based on intensity:
  
• 🟢: Low volatility (stable markets).
  
• 🟠: Moderate volatility (rising activity).
  
• 🔴: High volatility (dynamic price swings).
  
• Overlays the results on your chart, making volatility shifts visually apparent.
  

Inputs:

1. Price Sensitivity : Controls the length of the first smoothing period. A higher value smooths volatility over a longer timeframe, reducing sensitivity to short-term spikes, while a lower value makes it more reactive to recent price changes.
   
2. Lookback Period : Sets the lookback period for normalizing volatility. This determines how far back the indicator looks to establish a baseline range—longer periods provide a broader context, while shorter ones focus on recent market behavior.
   
3. Signal Smooth Period: Adjusts the length of the second smoothing period, applied to the normalized volatility. A higher value creates a smoother trend line, ideal for spotting longer-term shifts, while a lower value keeps it closer to real-time fluctuations.
   

Usage:

1. Add the indicator to your TradingView chart.
   
2. Adjust the inputs to match your timeframe or asset.