Volatility ratio
Volatility ratio
There is always a need to measure if the market is “quiet” or it is volatile. One of the possible ways is to use standard deviations, but the issue is simple: we do not have some levels that could help us find out if the market is in a state of lower or higher volatility. This indicator is attempting to do that :
- values above level 1 are indicating the state of higher volatility
- values above level 1 are indicating the state of lower volatility
Usage :
This is not a directional indicator. It should be used for volatility detection, not trend assessment – for that, you have to use some other indicator and then check this one if the market volatility conditions are those that you expect
