VRV 23

VRV 23

Class: oscillator/volatility
Trading type: intraday
Time frame: 1H -4H
Purpose: identification of reverse points
Level of aggressiveness: conservative


Indicator «VRV 23» is developed to search for reverse points of the local tendency and is based on volatility analysis. Using the normal distribution law as a theoretical basis, based on unique algorithm of signals generation, indicator «VRV 23» generates “buy” and “sell” signals and provides necessary information to set the basic parameters of the trade: take-profits and stop-losses.

Structure of the indicator

Indicator consists of two zones:
- warning zones (marked green) – used for color identification of the fact that current prices are close to the entry points;
- trading zones (marked red and blue depending on direction of signals) – used for color identification of the fact that current prices have reached the entry points. Blue zone – for “buy” signals, red zone – for “sell” ones.
To ease the trading process indicator displays on the chart “buy” and “sell” signals.
To manage the level of aggressiveness in trading there is input parameter "Averaging period" (by default = 11). The higher this parameter is the less number of signals is generated, but the better their quality is. And vise verse decrease of this parameter increases the aggressiveness of the trading and the number of generated signals, but can reduce their quality.

Rules of trading

When current price enters the green zone this is a signal to “be ready” for the position opening. Entering the red zone is a signal for “sell”. Entering the blue zone is a signal for “buy”.
Take-profit for “sell” is recommended to be set near the lower green line. Take-profit for “buy” is recommended to be set near the upper green line.
Also position can be hold till the opposite signal is generated.
Stop-loss for “buy” is to be set below the blue zone, for the “sell” – above the red zone.