A very simple script for MT4, the main purpose of which is to display volatility on your chart. With it, you can find out what movement made candles on average for a given period of time, what was the average or maximum body size of the candle, what length of their tails was fixed. The script plays the role of an additional filter to your trading system.
The script is simple. Let’s say you want to open a trade, but do not know what Stop Loss put up, this script will be able to tell you the movement that made previous candles, if the average volatility of Candles D1 for the last 200 days was, say 80 points, then we can assume that the next candle is likely to pass this movement and if you are a “Daily Trader” then the stop should be more than that value.
Or you want to open a position inside the day and close it before the next one, then you can see what size the average items were at the day candle, take that value away from the distance already passed at the moment and calculate whether on average there is enough more power to move today.
You can also consider the average or maximum size of the candle’s tail to analyze possible high/low rollbacks.
Of course, to trade only with this one script is not worth it, it only gives an additional hint.
For a more detailed calculation of volatility on H1 or D1, use our indicator TrulyVolatility.
|NumberOfBars||Number of closed candles to analyze volatility|
An example of how the script works:
The script is set on the graph as usual, displays the basic data:
- Count Bars is the number of bars involved in the calculation of volatility.
- Start Time, End Time is the start and end of the estimated period.
- Average Volatility is directly average volatility.
- Average Candle body – the average body size of a candle during a given period.
- Max Candle body, Min Candle body – the maximum and minimum size of candles found on the chart.
- The average size of a high candle shadow is the average size of the upper shadows (tails) of each candle.
- The average size of low candle shadow is the average size of the lower shadows (tails).
- Max high candle shadow – maximum size of the upper shadows (tail) of the candle involved in the calculation
- Max low candle shadow is the maximum size of the lower shade (tail) of the candle.
Simplicity is the key to success!