Volatility Step Channel

Volatility Step Channel is a VertexFX Client Side VTL indicator, that shows Step Channel based on volatility. Base Volatility Indicator monitors the changes in market prices and compares them to the historical values. The indicator is based on standard deviation computed from the past (historical) prices. It means that the faster the price in the market changes, the higher is the volatility of that market. In case the market price starts to change faster than it should according to the average of historical volatility or if the price crosses outside of a given range, the indicators will signal an oversold/overbought market.
The indicator has several parameters that you can change.
You can change the fast period, slower period, scale factor and method of calculating moving averages, which are used to calculate the value of the indicator.

Purpose And Use

The purpose of volatility-based indicators is very similar to the purpose of oscillators: to detect imbalances in the market and generate signals that can help us capitalize on these imbalances. These indicators also generate overbought/oversold signals.

If the price is rising too fast compared to the historical development, it can easily reach a stage in which the rise is no more sustainable. Volatility–based indicators inform us precisely about such situations.

Trading Signals

A common trait of all volatility-based indicators is that they generate buy and sell signals that are based on the concept of overbought/oversold market (just like oscillators). In case the price crosses above the upper bound of the range, in which it should be present according to the trends in historical data, a sell signal is generated. Conversely, if the price crosses under the lower bound of the range, a buy signal is generated.

Usage

• Download the attachment from vStore or directly from the vStore tab in your terminal by performing a right click on it and selecting Download & Install
• Copy it to your company VertexFX Local VTL Files folder i.e. C:ProgramDataVertexFX Client Terminals”Company name”VTL10Local VTL Scripts
• Restart your Client Terminal or Right Click on “Local VTL Scripts” Tree Node to find the script.