Fierytrading: Volatility Depth

Dear Tradingview community,

I'd like to share one of my staple indicators with you. The volatility depth indicator calculates the volatility over a 7-day period and plots it on your chart.

This indicator only works for the DAILY chart on BTC/USD.

I've color coded the indicator as follows:
- Red: Extreme Volatility
- Orange: High Volatility
- Yellow: Normal Volatility
- Green: Low Volatility

Red: extreme changes in price. Often during local tops and bottoms.

Orange: higher than average moves in price. Often before or after a "red" period. Often seen in the middle of bear or bull markets.

Yellow: normal price action. Often seen during early stage bull-markets and late stage bear-markets.

Green: very low price movement. Often during times of indecision. Once this indicator becomes green, you can expect a big move in either direction. Low volatility is always followed by high volatility.
In a long-term uptrend, a green period often signals a bullish break out. In a long-term downtrend it often signals a bearish break out.

How to use
Save the indicator and apply it to your chart. You can change the length in the settings, but it's optimized for 7 days, so no need to change it.

I've build in alerts for all 4 different volatility periods. In most cases, the low volatility alert is enough.

Good luck!

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Open-source script

In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.


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.

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