Relative Volatility Indicator
Volatility is one of the basic concepts of the market, meaning a price change over a certain period of time.
With this indicator, you will always know at what time of the day the trading instrument is more volatile, and at what hours the market is calm.
The indicator is based on statistics and reveals a constant structure of market volatility - this is one of the properties that does not change and is stable like sunset and sunrise.
How to understand the indicator readings:
Histogram of hourly relative volatility:
1. The value of the histogram column above zero means that at this time of day the volatility of the trading instrument is higher than the daily average.
2. The column of the histogram below zero shows the opposite state - low market volatility at this time.
3. The color of the histogram of the main color marked 'Norm' indicates that the last value of volatility for the hour of this column does not go beyond the statistics and corresponds to the expected type of volatility (large , small)
4. The color of the histogram is different and the column marked 'Outlier' indicates that there was an outlier at that time and the result does not correspond to what was expected. If the histogram is above zero, a large volatility was expected, but it was small and vice versa.
5. The clock above/below the histogram indicates the current hour of the day.
The information in the indicator is displayed from left to right from 00:00 to 23: 00 hours.
Information indicators in the right part of the indicator:
Statistic - shows the value of the relative volatility of the current hour (the same as in the histogram).
Estimated - is the estimated expected value of relative volatility based on the current state of movement of the trading instrument.
Reality - the actual volatility for the last hour.
For the indicator to work correctly, it is necessary to load more than a year H1 of the history of the selected trading symbol and more than 60 minutes on the M1 period!