Ultimate Volatility Cloud

23 May

Ultimate Volatility Cloud

The Ultimate Volatility Cloud is a powerful and highly customizable indicator designed to help traders visualize market volatility, easily identify trend, and overextended moves in price with adaptive bands. It combines the strengths of the Arnaud Legoux Moving Average, Kaufman's Adaptive Moving Average, ATR Channels, and Standard Deviation bands, offering multiple pre-configured profiles and extensive customization options.

Key Features:

• Dynamic Volatility Bands: The indicator plots multiple layers of volatility bands around a central basis line, providing a comprehensive view of price deviation.
  
• Hybrid Band Calculation: Bands are a sophisticated blend of Keltner Channels, KAMA ATR Channels and Standard Deviation, allowing for a nuanced representation of volatility.
  
• Adaptive Smoothing: Bands are smoothed using either Exponential Moving Average (EMA) or Kaufman's Adaptive Moving Average (KAMA) based on the selected profile, ensuring responsiveness tailored to market conditions.
  
• Layered Fills: The cloud uses distinct color fills for different volatility levels, making it easy to visually interpret price action relative to its typical range.
  
• Customizable Color Themes: Choose from a variety of pre-set color themes, including "Rainbow," "Wild," and "Monochrome," or stick with classic options to suit your visual preference.
  
• Optional Basis Line Plots: Display the EMA or KAMA basis lines (used in Keltner Channel calculations) separately on the chart for additional analysis.
  

Understanding the Profiles:
The indicator comes with several pre-configured "Settings Profiles" that adjust the internal parameters (Keltner Channel/KAMA Channel/Standard Deviation band blend, and band smoothing) to suit different trading styles or market environments.

1. Standard Profile:

Blend: 60% Keltner Channel, 40% Standard Deviation.
Smoothing: EMA smoothing of 3 periods.
Purpose: A balanced, general-purpose profile suitable for a wide range of market conditions. It offers a good blend of trend following and volatility awareness.

2. Responsive Profile:

Blend: 40% Keltner Channel, 60% Standard Deviation.
Smoothing: EMA smoothing of 2 period.
Purpose: Designed for traders who need quick reactions to price changes. The higher Standard Deviation blend and minimal smoothing make it highly sensitive to immediate volatility shifts, ideal for short-term analysis or identifying early moves.

3. Ranging Market Profile:

Blend: 80% KAMA ATR Channel, 20% Standard Deviation.
Smoothing: KAMA smoothing.
Purpose: Optimized for sideways or consolidating markets. By utilizing KAMA-based ATR bands and KAMA for band smoothing, this profile adapts its responsiveness to reduce whipsaws in choppy conditions, providing clearer boundaries for range-bound price action.

4. Trend Following Profile:

Blend: 90% Keltner Channel, 10% Standard Deviation.
Smoothing: EMA smoothing of 5 periods.
Purpose: Tailored for riding strong trends. The heavy emphasis on the Keltner Channel and slightly smoother bands help filter out minor fluctuations, allowing traders to focus on the dominant directional movement.

5. Conservative Profile:

Blend: 65% KAMA ATR Channel, 35% Standard Deviation.
Smoothing: EMA smoothing of 10 periods.
Purpose: Aims to provide more filtered signals and reduce noise. The KAMA basis for the Keltner Channel combined with a longer EMA smoothing period offers a slower, more confirmed view of volatility, suitable for traders seeking higher conviction entries or exits.

Example of the Ranging Market Profile


How to Use:
The volatility cloud can be interpreted in various ways:

Price within the inner bands: May indicate consolidation or a period of lower volatility.

Price pushing into outer bands: Suggests increasing volatility and potential for a strong move.

Price breaking out of extreme outer bands: Can signal significant momentum and the start or continuation of a strong trend.

Cloud expansion/contraction: Visually indicates periods of increasing or decreasing market energy.

Experiment with different profiles and settings to find the combination that best suits your trading strategy and the instruments you trade.

23 May

Sürüm Notları

Added candle colors to each theme
Added candle colors (on by default)
Added adjustable transparency to cloud (higher is more transparent)

25 May

Sürüm Notları

Correct some default values
Added new color theme (Futuristic)

29 May

Sürüm Notları

Ultimate Volatility Cloud now includes a future forecast!

How It Works:

1. Price Analysis - Uses linear regression on recent price action to identify trend
   
2. Momentum Factor - Adds recent momentum influence that decays over forecast period
   
3. Volatility Projection - Forecasts ATR based on selected method
   
4. EMA Calculation - Calculates forecasted EMA basis using predicted prices
   
5. Channel Generation - Derives Keltner Channel bands from forecasted basis + projected volatility
   

7 Haz

Sürüm Notları

Color theme bug fix.
Color profile changes should now work correctly.