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What is the most accurate volatility indicator?


mograst

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Sure. There are two parts to this superb indicator, trend and volatility.

 

For trend, when bars of the Histogram are red and moving down, it means that the linear regression slope (and thus trend) is down. When blue and moving up, tend is up...

 

The volatility part of the indicator is the dots at the zero line. When yellow, normal volatility. When gray, you have a low volatility setup and you can expect a large move shortly !

 

One way to play the low volatility setup is to wait for a breakout and go with the direction that the trend part of the indicator shows. I personally like fractal breakouts as they are well defined. Don't try to anticipate the breakout,,, wait for it and if false you may want to quickly reverse if first breakout fails and then breaks out in the opposite direction. Two caviates, best to not look for low volatility during normally slow periods such as Asian session. Also, check the news. Right before a big news, you will almost always get a low volatility setup, so beware........

 

To me, the most value is in zeroing in on when a market is likely to make a big move. Markets tend to move from periods of consolidation to periods of large trending moves. This indicator can tip you off IN ADVANCE as to when to expect a large trending move to begin!

 

A couple other points. I suggest you make the dots larger to see more clearly and if you like change the colors...

 

Hope that helps. Your Friend, Diesel

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