Extreme Volatility Excess {LuTrader LB}

This indicator shows the movement of price volatility considering 2 levels of excess.
Volatility is shown with 2 lines, a thinner fast one, and a sharper slower one.
The first level of excess is orange (weakest) and the second is red (extreme level).

Below the orange level we have a volatility start situation, this means that the lower the volatility value, the more the probabilities of an increase in the latter increase.
From there, prices start to go up or down, so we will expect increased volatility.

Between the first level of excess and the extreme level we find ourselves in a situation of increased volatility in which in most cases the trend continues.

Above the extreme level we reach the volatility peak which usually leads to even a very short-term reversal or a slowdown in prices and volatility before a new directional move.

From the example below we see an example of a possible Long trade in which volatility remains below the extreme level, this allows us to understand that we can still keep our position alive until the extreme level is violated.


To summarize, this indicator allows us to have further support to understand how long we can keep a position open and when it can be a good time to close it. See the example below.


I recommend using this indicator along with other indicators to get more confirmation. It is not an indicator that shows entry triggers.
I use this indicator together with my LuBot main indicator with which I perform my analyses.