When the volatility of a financial instrument dips below a certain threshold, both long-term and short-term trading strategies can hit a rough patch, leading to missed opportunities and unprofitable trades.
The duration of this "calm" market phase can vary, but during these times, it's wise to pivot towards scalping strategies that leverage hourly volatility. To identify potential market patterns, having the right tools at your disposal is crucial.
Size Highs And Lows is an invaluable indicator that displays the magnitude of highs and lows over a specific timeframe, calculated in a manner akin to the Price Channel indicator.
Fig. 1. Size Highs And Lows indicator
- Values greater than 0 on the histogram indicate the size of the highs, with bullish bars displayed in yellow and bearish bars in brown.
- Values less than 0 reflect the size of the lows, where bearish bars are in light green and bullish bars are in green.
To grasp the concept better, you can also examine it alongside the Break_Lag_ATR indicator:
Fig. 2. Size Highs And Lows + Break Lag ATR indicators
The chart above illustrates that increased volatility can linger for a while following a volatility breakdown. This period can be golden for scalping, but the key is to identify those patterns!
Input Parameters:
This indicator comes with two simple input parameters (periods):
| Parameter | Value |
|---|---|
| Period Max High | 30 |
| Period Max Low | 30 |
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