Volatility Stop Oscillator Using Average High-Low Range

Summary

The Volatility Stop Oscillator is a volatility measure described as drawing on Thomas Bulkowski’s selling guidance. It has two configurable inputs: a calculation period and a multiplier that sets the line’s deviation relative to price. Its calculation takes the difference between the period-based simple moving averages of highs and lows, then scales that range by the multiplier and divides by the close.

The description says the oscillator can be used alongside a Volatility Stop indicator, but it does not specify entry or exit rules, parameter-selection guidance, or empirical results. The formula provides a compact measure of average high-low range relative to closing price; the material offers no evidence that it predicts returns or improves a trading strategy.

Key ideas

• The oscillator scales an average high-low range by a multiplier and divides by the closing price.
• Its inputs are the calculation period and the multiplier.
• The measure is intended for use with a Volatility Stop indicator.
• No trading rules, parameter guidance, or performance evidence are provided.

Tags

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