Next Generation Volatility Indicator – Trading Systems – 8 August 2022

Next Generation Volatility Indicator

Introduction to Volatility 

Volatility is the most watched variable among the institutional traders because the market volatility have a direct impact on their trading risk. It is not easy to meet up any successful traders without emphasizing the importance of the volatility for their trading. In addition, we can even find countless trading strategies or trading courses based on the market volatility around us. In spite of its high importance, unfortunately, the access to the volatility tools for average traders are not easy in general. It is partly true that the library of the price based technical analysis is ever growing whereas the development in the volatility based technical analysis is almost halt after the invention of Bollinger bands in 1980s by John Bollinger. In general, you can find fewer number of the technical analysis tools based on the volatility in the most of trading or charting platforms. Here is the list of some popular volatility indicators for traders.

• Standard Deviation indicator

• Average True Range indicator

• True Range Indicator

• Keltner Channel

• Bollinger bands indicator

Regardless of fewer tools available to analyse the market volatility for traders, the high importance of watching market volatility will never change in the future.  Market can only move as much as the fuels available in the market. Therefore, watching the market volatility will never harm your trading but will do many good things for your trading.

Overview on the Harmonic Volatility Indicator

Harmonic Volatility Indicator was originally developed to overcome the limitation of Gann’s Angle, also known as Gann’s Fan. For this reason, trader can use Harmonic Volatility Indicator like Gann’s Angle (or Gann’s Fan). At the same time, the harmonic volatility indicator bases its core concept on the Volatility and Fibonacci analysis, which is distinctive from the Gann’s Angle. Therefore, the Harmonic Volatility Indicator can offer many other benefits, which are not offered by Gann’s Angle. In this article, we will talk about the Harmonic Volatility Indicator without comparing it to the Gann’s Angle because there are many traders who are not familiar with Gann’s technique.

You can read everything about volatility trading from this original article. 

Fibonacci Volatility Indicator

Fibonacci Volatility indicator can provide the market volatility in visual form in your chart for your trading. You can use Daily, Weekly, Monthly and Yearly Volatility for your trading. The most important application of this Volatility indicator is to detect the potential breakout area, potential bullish reversal area and potential bearish reversal area. When you want to visualize the Volatility for your trading, this is the best tool available in the market. Additionally, you can also use the Movable Volatility indicator and you can set the alert at low and high volatile area in your chart.

Harmonic Volatility Indicator

Harmonic Volatility indicator also provides the market volatility in visual form in your chart for your trading. This tool can be used to visualize the Daily, Weekly, Monthly and Yearly Volatility.  The difference between Harmonic Volatility indicator and Fibonacci Volatility indicator is that you can only use Probability Configuration mode in the Harmonic Volatility indicator whereas in the Fibonacci Volatility indicator you can access both Probability Configuration and Z Score configuration. This is cheaper than Fibonacci Volatility indicator. Hence, this is the light version of the Fibonacci Volatility indicator.