Volatility Quality Slope Signals with ATR-Scaled Filtering

Summary

This indicator adapts the Volatility Quality concept attributed to Thomas Stridsman. Rather than estimating trend with moving averages, this version uses the indicator’s slope and treats color changes as potential signals. The document gives no detailed formula for calculating Volatility Quality or its slope, so it does not specify how those components are implemented.

To reduce frequent signals, it filters changes using a percentage of Average True Range (ATR). The stated rationale is that a fixed pip threshold may not transfer well across instruments or time frames, while an ATR-based threshold adjusts to their ranges. The document provides no backtest results, parameter guidance, or rules for entries, exits, and risk management. Color changes are presented only as signals to consider, not as a complete or validated trading strategy.

Key ideas

• The indicator uses the slope of Volatility Quality instead of moving averages to estimate trend.
• Color changes can serve as potential signals.
• An ATR percentage filter is intended to reduce signals and adapt across symbols and time frames.
• The document gives no performance evidence or complete trading rules.

Tags

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