Volatility Ratio (Schwager)
This ratio is similar to one used by Jack Schwager in Technical Analysis to identify wide-ranging days.
Active or Reactive?
Many investors follow active strategies but end up being reactive, rotating in and out of stocks at the wrong time.
Colin Twiggs' free weekly review of global markets will help you identify market risk and improve your timing.
Microsoft Corporation with 14-day Volatility Ratio (VR).
Mouse over chart captions to display trading signals.
Wide ranging days are signaled by a Volatility Ratio greater than 2.0
- A wide-ranging day signals a likely reversal.
- Price gaps sharply upward.
- A downward gap signals the completion of an island cluster reversal, formed by  and .
The default period for Volatility Ratio is 14 days. To alter the default settings - Edit Indicator Settings.
See Indicator Panel for directions on how to set up the indicator.
Volatility Ratio = True Range / EMA of True Range for the past n periods
True Range is the greater of:
- The day's High minus the Low;
- Today's High minus yesterday's Close; and
- Yesterday's Close minus today's Low.