Historical Volatility Bands and Their Color-Coded Midline

Summary

The document describes a technical indicator built around an average-valued middle line and upper and lower bands calculated using historical volatility. It also explains a visual convention: the middle line can take one of three colors, while the bands use their own colors.

When the two bands share a color, the middle line adopts that color; when the bands differ, the middle line uses a neutral color. This gives a compact visual cue about agreement between the bands. The text does not specify the volatility formula, lookback period, thresholds, or how a trader should interpret band touches or color changes. It provides no performance evidence, tested rules, or risk guidance, so it should be read as an indicator description rather than a complete trading strategy.

Key ideas

• The indicator places an average-valued line between upper and lower bands derived from historical volatility.
• The middle line has three possible colors, unlike the bands.
• The middle line matches the bands when their colors agree and turns neutral when they differ.
• The document gives no parameter settings, trading rules, or empirical performance evidence.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.