Volatility Step Channel is a
VertexFX Server 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 (previous values). The indicator is based on
standard deviation calculated 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 them anytime.
You can change the fast period, slower period, scale factor and method of calculating moving averages, which are used to calculate the value of this indicator.
The aim of volatility-based
indicators is very similar to the aim of oscillators: to detect imponderables in
the market and generate signals that can help us capitalize on these imponderables.
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 accurately
about such situations.
A common characteristic 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.
To use Volatility Step Channel indicator
download it from here, then place it at VertexFX VTL directory:
C:\ProgramData\VertexFX Client
Terminals\"Company name"\VTL10\Local VTL Scripts
Then right click on the tree and
select refresh or restart your client station and you will find under VTL local scripts in your client terminal.
You can check this video that
talks about Volatility Step Channel indicator: