OPEN-SOURCE SCRIPT
Updated Variation Oscillator
The Variation Oscillator is a volatility-type indicator.
This indicator is based on a statistical measure known as coefficient of variation (COV).
COV is a standardized measure of dispersion for a set of values.
COV = 100 * standard deviation / mean
This oscillator measures the difference between COV and its sma and plots this difference.
Formula: Oscillator value = COV - sma of COV
The oscillator is positive when COV is greater than its sma.
The oscillator is negative when COV is lesser than its sma.
How to interpret the indicator's values:
Positive : the current volatility is higher than normal and trading is permitted.
Negative : the current volatility is lower than normal and trading is NOT permitted.
Recommended settings:
Cov = 10
Sma = between 20 and 100
*** If you're reading this and you find this indicator interesting, hit the like button and follow me!
*** Also comments are welcomed!
Happy trading!
This indicator is based on a statistical measure known as coefficient of variation (COV).
COV is a standardized measure of dispersion for a set of values.
COV = 100 * standard deviation / mean
This oscillator measures the difference between COV and its sma and plots this difference.
Formula: Oscillator value = COV - sma of COV
The oscillator is positive when COV is greater than its sma.
The oscillator is negative when COV is lesser than its sma.
How to interpret the indicator's values:
Positive : the current volatility is higher than normal and trading is permitted.
Negative : the current volatility is lower than normal and trading is NOT permitted.
Recommended settings:
Cov = 10
Sma = between 20 and 100
*** If you're reading this and you find this indicator interesting, hit the like button and follow me!
*** Also comments are welcomed!
Happy trading!
Release Notes
After receiving feedback, I've decided that the oscillator should have 2 colors: green and red. This makes it easier to read it.How to interpret indicator:
Green - trending; trading is permitted.
Red - consolidation; trading is NOT permitted.
Release Notes
Change in colors: Blue - trending, trading is allowed
Gray - consolidation, no trading allowed
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.