Volatility explosion detector
Current volatility against its recent average: 1.0 is normal, above 1.4 is a spike, direction not shown.
It takes the 14-bar ATR, the average true range of recent bars, and divides it by the close so it is a share of price. It then divides that by the average of the same measure over the last lookback bars. 1.0 means volatility matches its recent average, 2.0 means double it. It measures how wide bars are, not which way price moves.
How to read it
- The line sits in its own pane below the price and hovers around 1.0.
- Above 1.4 is the top 5% of bars in the sample: bar ranges running well above their recent norm.
- Below 0.72 is the quietest 5% of bars.
- It does not show direction, so read it next to the candles for which way price is moving.
What it outputs
- Volatility ratio
- Current normalized ATR divided by its average over the lookback bars. About 1.0 is typical; higher means volatility is spiking.
Settings
- lookback
- How many recent bars make up the average that today's volatility is compared with. Below 5 the line stays flat at 1.0. Short windows react to the last few bars and spike often; long windows give a steady baseline that moves only on sustained change.
Pitfalls
- Lookback below 5 gives a flat line at 1.0 for the whole chart, although the catalog allows a minimum of 1; the baseline needs at least 5 bars.
- While ATR warms up the line is blank, then the first four readings are exactly 1.0. That looks like normal volatility rather than too little data.
- The name says VIX-style, but this is a bar-range ratio, not implied volatility. It has no direction: its correlation with the close is about zero in the sample.