Each of the indicators within the V-Coils™ & NR Breakouts Volatility Compression Package is specifically designed to highlight only meaningful contractions and expansions in volatility and Average True Range (ATR), which often lead to explosive price action within a relatively short time period. The various V-Coil signals are incredibly accurate at predicting large, explosive price moves just before they actually occur.
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The indicators included within the V-Coils™ Indicator Package are:
The V-Coils™ Indicator is extremely effective at accurately predicting large expansions in volatility and ATR just before they actually occur. The underlying concept behind V-Coils™ is that when volatility compresses and violates specific thresholds; sharp expansions in volatility and ATR are likely to occur, which often coincide with large, explosive price moves. In order to achieve their desired setups and register signals, V-Coils™ require several bars of increasingly compressed volatility. Therefore, in direct contrast to Narrow Range and Inside Day bars, you should anticipate an extensive or prolonged expansion in volatility and ATR when a V-Coils™ signal plots.
These small White bars alert the user to a significant contraction, or “Compression”, in volatility. When a “Compression” signal appears, the user should remain on high alert for the possibility of a V-Coil™ signal appearing, which would signal a transition from steadily contracting to markedly expanding volatility and ATR.
*** While Compression signals often appear just prior to V-Coil™ signals, the user must understand that this duo is not mutually inclusive, meaning that one signal can appear without the other. We routinely observe instances where Compression bars plot just prior to significant expansions in volatility and ATR without subsequently registering a V-Coil™ signal.
These small Yellow bars reflect a transition in short-term volatility from the “Compression” territory and into the requisite thresholds (the Coil-Zone) that must be breached in order to register a V-Coil™ signal. In other words, think of these small Yellow bars as something of a midway or fueling point, frequently occurring between the periods where volatility contracts in the Compression phase and where it begins expanding once again, possibly registering V-Coil™ signals. Hence, the term Coil Zone represents the transition phase that typically precedes the powerful re-expansion of volatility and ATR after a V-Coil™ signal plots.
These tall Red bars usually trigger after or amidst Coil Zone bars or Compression bars. V-Coil™ signals indicate that a significant expansion in volatility and ATR may immediately occur. Though highly unusual, V-Coil™ signals can occur without any prior Compression or Coil Zone bars.
These tall Magenta bars trigger when multiple V-Coil™ signals simultaneously register across three different input settings. Mega V-Coil™ signals are exceedingly rare. When we at Fibozachi perform a scan upon the entire list of 7000+ individually listed securities, typically only one or two Mega V-Coil™ signals appear on any given day. Nevertheless, Mega V-Coils™ are the strongest and most reliable of all our volatility signals, signifying the onset of an abrupt expansion in volatility and ATR. The appearance of a Mega V-Coil™ signal for an option trader is like finding out about a surprise party just a day or two before it happens; they each know in advance both where and when all of the action is going to be!
These large round dots are only generated when a volatility signal satisfies the strictest criteria and technical guidelines. A “Filtered” volatility signal is superior to “unfiltered” signals, since they are more accurate and have a higher rate of follow- through. By requiring that an extensive amount of volatility-based technical criteria has been satisfied, the “Filtered” signals are truly the “Cream of the Crop” amongst all volatility-based trading indicators. These signals have an extraordinary track record in predicting drastic increases in volatility and significant price moves, before they actually occur!
Narrow Range (NR) bars occur when the entire High-Low price range of a bar is smaller than the entire High-Low range of all of the previous “N” bars before it. An Inside Day (ID) occurs when the entire High-Low price range of a single bar fits within (is engulfed by) the entire High-Low price range of the previous bar. Though termed “Inside Day,” the concept is equally applicable across all fixed periods, including time, tick and volume methodologies. Combining these two concepts of Narrow Range and Inside Day bars provides valuable warnings in anticipation of significant expansions in short-term volatility and ATR.
While NR-4 and NR-7 breakouts are often the only two Narrow Range signals discussed throughout the trading community, we went a step further and designed our Narrow Range Indicator to plot color-coded NR-4 through NR-50+ setups as both histograms and text signals. We also included Inside Bar signals that plot as a single White Dot atop histogram bars.
NR-4 tends to be the weakest of all Narrow Range setups while NR-50+ Inside Day bars (NR-50/ID) often presage some of the most powerful price thrusts. Please note that Narrow Range - Inside Day setups typically provide follow through within their next few immediate bars, so you should not necessarily anticipate an extensive or prolonged expansion in volatility and ATR.
As the duration of consecutive NR bars increases, the range of short-term volatility and ATR continually contracts. Although this point may seem obvious, it is important to reiterate. To this end, the most powerful Narrow Range setup is the NR-50/ID (the “50” period Narrow Range - Inside Day); these setups display High-Low trading ranges that are not only smaller than their previous 50+ bars but are also completely engulfed by their prior bar.
Both V-Coils™ & NR-Breakouts also come with special pre-formatted “Market Analyzer” and "RadarScreen" Indicators and templates for all NinjaTrader & TradeStation users. All of the columns, colors and text are completely customizable so that you can personalize it to your own preferences. As you can see from the screenshot below, using V-Coils™ & NR-Breakouts with the NinjaTrader Market Analyzer or TradeStation RadarScreen allows you to quickly scan an entire list of symbols for the most important information in just seconds! You can also sort the data by any column to organize your scan results into easy-to-read lists.
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