volatility
What Is It?
The Volatility pillar is a Stochastic RSI-based line — a stochastic applied to an RSI. It is a faster, more sensitive oscillator than the Momentum line, designed to capture short-term exhaustion and the precise moment when price momentum begins to shift direction.
It appears as an orange line on the oscillator panel.
UI name: "Enable Volatility" in the settings panel. The line is labelled "Volatility" in the Style tab.
How It Works
The Volatility line measures where the current RSI value sits relative to its own high-low range over the lookback period. This makes it react quickly to reversals in momentum, faster than the Momentum line alone.
The raw value is smoothed with a 3-period SMA to reduce noise (the standard "smooth K" step).
Internal Parameters (Fixed)
RSI Length
14
Stoch Length
14
Smooth K
3
Smooth D
3
Role in Signal Generation
The Volatility line is used as a directional gate — it answers the question: is momentum entering from a healthy starting position?
Long Gate
A long signal gets Volatility approval when:
The Volatility line is rising strongly (up for 2+ bars with sufficient delta) or it recently touched the Volatility Oversold zone (≤20) and is now turning up
AND the Volatility line is not currently overbought (≥80) — you don't want to enter a long when Volatility is already maxed out
Short Gate
Mirror logic:
The Volatility line is falling strongly or it recently touched the Volatility Overbought zone (≥80) and is now turning down
AND the Volatility line is not currently oversold (≤20)
Curl Protection
The Volatility line also contributes to a curl protection filter that runs automatically. This filter blocks counter-trend entries when both Momentum and Order Flow are clearly moving against the intended direction:
If Momentum is rising for 2 bars, above its MA, and Order Flow is also rising → short signals are blocked
If Momentum is falling for 2 bars, below its MA, and Order Flow is also falling → long signals are blocked
Reading the Orange Line
Below 20
Volatility Oversold — potential long entry zone
20–80
Neutral territory
Above 80
Volatility Overbought — potential short entry zone
The solid red line at 80 and solid green line at 20 mark these boundaries on the panel.
Note: The Volatility line being overbought does not mean the trend is over. In strong trends, it can remain near the extremes for extended periods. Use it alongside the Momentum and Expansion Wave pillars for context.
Settings (State Section in UI)
Enable Volatility
✅ On
Enables the Volatility pillar
Volatility Overbought
80
Volatility level considered overbought
Volatility Oversold
20
Volatility level considered oversold
Tips
On very short timeframes (5m, 1m), the Volatility line can be noisy. Consider raising the Overbought level to 85 and lowering the Oversold to 15 to require a more extreme reading before the gate activates.
The Volatility line acts as a final directional gate before a signal fires. Even if Expansion Wave, Momentum, and Order Flow all agree, a signal will be blocked if the Volatility line is in the wrong zone.
Watch for the orange Volatility line curling up from below 20 — this often visually precedes a green long dot by 1–2 bars, giving you an early visual cue.
You can hide the Volatility line in the Style tab without disabling the pillar — useful for a cleaner chart while keeping the logic active.
Was this helpful?