AiM.RealVol (2 lines)
This indicator study for TradeStation calculates and plots realized volatility over two different time periods on daily charts. It helps traders compare short-term and long-term volatility, potentially identifying changes in market conditions and risk levels to inform trading decisions.
Key Features
- Calculates realized volatility using the official S&P Dow Jones methodology
- Uses customizable time windows (default 21 and 63 days) for short-term and long-term volatility
- Expresses volatility as an annualized percentage for easy interpretation
- Plots both short-term and long-term realized volatility for comparison
How to Apply
- Open a daily chart for your desired ticker symbol in TradeStation.
- From the EasyLanguage shortcut bar, select "Indicators" and choose AiM.RealVol 2 Lines.
- Apply the study to your chart.
Note: This study is designed for daily charts to calculate meaningful realized volatility.
Inputs to Adjust
- ShortWindow (default: 21): The number of days for short-term volatility calculation.
- LongWindow (default: 63): The number of days for long-term volatility calculation.
Adjust these inputs based on your preferred short-term and long-term volatility measurement periods.
Interpreting the Results
- The study plots two lines: RealVol 1 (short-term) and RealVol 2 (long-term).
- Values are expressed as annualized percentages, consistent with industry standards.
- Higher values indicate higher volatility (more price fluctuation) in the respective time period.
- When short-term volatility exceeds long-term volatility, it may indicate increased market turbulence.
- Conversely, when short-term volatility drops below long-term volatility, it might suggest a calming market.
- Volatility trends and crossovers between the two lines can signal potential changes in market conditions.
Additional Information
- The volatility calculation strictly follows the S&P Dow Jones Realized Volatility Indices Methodology.
- Results are directly comparable with published S&P Dow Jones Realized Volatility Indices.
- The study uses logarithmic returns, which is the standard approach in financial volatility calculations.
- Be aware that realized volatility is backward-looking and may not predict future volatility.
- Consider using this indicator in conjunction with other technical and fundamental analysis tools.
Note: This study is designed for educational and informational purposes only. It should not be considered financial advice. Always conduct your own research and consider consulting with a financial advisor before making investment decisions.