Description:
When it comes to trading, volatility is your best friend. No price movement means no profit - and certainly no loss!
The Actual Volatility Scanner indicator displays horizontal bars that represent candle bodies based on a selected index (TrackedCandleIndex).
Each candle body's size is compared to its average size (CandleAverageNumber), providing a clear visual representation of market activity.
For example:
In the image above, the CADCHF pair shows significant volatility with a value of 221%. This indicates that the current candle body is over two times larger than the average body for CADCHF on the current timeframe. Conversely, the GBPAUD pair is displaying low volatility, with its body size only 5% of its average, signaling a lack of movement.
Within the indicator window, you can customize the following settings:
TextSize,
ReferenceBody - specifies the length of the body bars,
CandleAverageNumber,
TrackedCandleIndex - where zero (0) represents the current candle, one (1) the candle from one period ago, and so forth,
HorizontalStartPosition - determines how far from the right edge the indicator will be displayed.
You can even place multiple instances of the indicator on a single chart to get a more comprehensive view of the price landscape. If you add another instance for a different candle index, just remember to adjust the HorizontalStartPosition to avoid any overlap.
Usage:
Monitoring actual volatility: Low volatility can indicate a consolidation phase, which often precedes larger price movements. Conversely, if a very large candle appears, it’s less likely that a similarly large candle will follow.
Correlation analysis: The image above illustrates a strong price movement across all three American indices one timeframe back, showcasing their high correlation. In contrast, pairs involving EUR demonstrate very low volatility, while pairs with CHF exhibit strong movements.
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