Damiani Volatmeter for Distinguishing Trends from Flat Markets
Summary
The Damiani Volatmeter is presented as an indicator for distinguishing trending conditions from flat or quiet markets. Its settings include two lookback periods called viscosity and sedimentation, a threshold, an optional lag suppressor, and the price series used in the calculations. The indicator compares average true ranges across the two periods to form a main line, and compares their standard deviations against the threshold to form a second line. With lag suppression enabled, the main line also incorporates earlier values of itself.
The document shows the formulas and references chart examples with and without the lag suppressor, but supplies no rule for interpreting crossings, selecting settings, or entering and exiting trades. It offers no backtest, market-specific evaluation, or evidence that the indicator improves results. The indicator may be useful as a volatility-based regime filter, but its practical value and sensitivity to parameter choices remain unestablished here.
Key ideas
- The indicator is designed to classify market conditions as trending or flat.
- It compares average true range and standard deviation over two configurable periods.
- A threshold and optional lag-suppression adjustment affect the displayed lines.
- The document does not provide trading rules or performance tests.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.