Using Cercós Chaos vs Movement as a Volatility Filter

Summary

The document describes a volatility indicator intended to distinguish directional movement from choppy or range-bound price action. It suggests using relatively short chart periods, specifically five to ten, and treating the relationship between its green and red lines as a market-condition filter: green above red permits trading, while green below red signals range-like conditions.

The indicator is explicitly not presented as an entry signal. Instead, it is meant to be paired with another tool that supplies entries. The document provides no formula, chart examples, tested markets, or performance evidence, so the line relationship and suggested periods should be treated as usage guidance rather than a validated strategy. It also does not specify position sizing, exits, or how to manage false regime readings.

Key ideas

• The indicator is intended to distinguish movement from choppy market conditions.
• A green line above the red line is described as a condition that allows trading.
• A green line below the red line is interpreted as range-bound or choppy action.
• The indicator serves as a volatility filter rather than an entry trigger.
• The document recommends combining it with a separate entry signal and gives no performance evidence.

Tags

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