Introduction
For ships at sea, the lighthouse flashing its constant signals is a warning of one thing – danger ahead. The Quantum Dynamic Volatility indicator is the trader’s lighthouse. It is a warning of possible danger ahead, signaling extreme volatility in the market, and potential hazards for the unwary trader.
The indicator signals this volatility, using average true range. It is constantly scanning the price action for extremes, and when they arrive, are signaled on the chart with a purple arrow, above and below the candle. This is a warning signal to stay out. What often happens following these periods of volatility is that the price action then retraces, and trades within the spread of the candle or bar. The reason for this is easy to understand. The market moved sharply higher or lower on a news release. Excited, forex traders then jump into the move, hoping for some easy money. The market makers then reverse the price action, leaving these traders trapped in weak positions.
This happens repeatedly and is the reason why we developed the indicator. To signal these volatile bars and candles in real time, and the associated warning to take care. Generally, once the signal is triggered, you will find the market moving back into the range of the bar or candle, before moving breaking higher or lower in due course. Once the price action has been validated by a clear move away, then it is safe to consider taking a position in the market once again.
The Quantum Dynamic Volatility indicator is sending a clear warning. It’s warning of high risk and telling you to take care. The indicator paints two arrows, one above and one below the candle or bar.
The Quantum Dynamic Volatility indicator works in time-based charts and other chart types.
Installation
Open your NinjaTrader 8 platform and select a chart.
Right click the chart to bring up a menu which looks like the following image:
Select Indicators… which will open the following window. Alternatively, you can open this window by clicking the Indicators button in the chart toolbar or by pressing Ctrl + I while focused on the chart.
In the Indicators window under Available section, go to Quantum > Quantum Dynamic Volatility and click it to select the indicator. Once selected, click “add” under the Configured section which will put it on the list of active indicators to be added in the chart.
Before clicking the OK or Apply button to complete, the indicator has several configurable options. You can click the Apply button at any time, and this will apply any changes you have made to the indicator without closing the window. This will allow you to see the changes you have made to the indicator, without closing with the OK button or the Cancel button.
Configuration
All user input can be configured at the right-hand side of the Indicators window under the Properties section. These are the default settings when you add the indicator in a chart.
Main Settings
Alert
The following settings affect the indicator’s alert notifications displayed in the Alerts Log. You can open the Alerts Log from your NinjaTrader 8 client’s menu bar in the main window at New > Alerts Log.
Alert On Volatility
When enabled, the indicator sends an alert notification in the Alerts Log when a volatile candle is detected.
Alert Rearm Time (Seconds)
This adds a delay to the next alert notification, expressed in number of seconds.
Alert BG Color
This setting allows you to customize the background color of the indicator’s messages as they appear in the Alerts Log.
Alert Text Color
This setting allows you to customize the color of the text as the indicator’s messages appear in the Alerts Log.
Alert Sound File
You can change here the sound file the platform uses when this indicator triggers an alert. By default, it uses the Alert1.wav file packaged with your NinjaTrader installation. Please make sure that the file is supported and the absolute path to the sound file is entered correctly.
Parameters
Offset
Adjusts the position of the indicator’s markers away from the candlestick bars.
Sensitivity
Increasing the value of this setting makes the indicator more sensitive to volatile price action which also creates more signals.
Other Settings
Data Series
Input Series
Opens the indicator Input Series dialogue which allows you to select the source of data for your indicator’s calculations.
Setup
Calculate
Sets the frequency at which the indicator performs its calculations.
Label
The label of the indicator’s instance displayed on the chart.
Maximum bars look back
Determines the maximum number of bars the indicator can look back to perform calculations on historical data. This is set to 256 by default (the most memory-friendly setting), but it can be changed to “infinite” to allow for a greater look back period.
Visual
Auto scale
When enabled, the indicator will be included in the chart panel’s vertical automatic scaling.
Displacement
Sets the number of bars by which to displace the indicator plots.
Display in Data Box
Enables or disables the inclusion of the indicator’s plot values in the Data Box
Panel
Sets the panel in which the indicator is plotted. If you select “Same as input series,” the indicator will be linked to the Input Series and automatically move if the Input Series is modified to a different panel.
Price marker(s)
When enabled, the indicator value is plotted in the axis selected under the “Scale Justification” property.
Scale justification
Sets the scale on which the indicator will be plotted. Possible values are “Right,” “Left,” and “Overlay”.
Visible
Enables or disables visibility and function of the indicator on the chart.
Plots
Sets a variety of parameters, such as color, for the plots drawn by the indicator.
- WideRangeTop
- WideRangeBottom
Unloading the indicator
Here are the steps to remove the indicator in the chart.
Right-click on the chart then select Indicators… from the menu. Select Quantum Dynamic Volatility from the Configured section and click “remove” then OK to confirm and the indicator should be unloaded from your chart.
Using the Quantum Dynamic Volatility in the NinjaTrader Market Analyzer
Valid Rows
The Quantum Dynamic Volatility indicator works in any instrument.
Adding the Quantum Dynamic Volatility as a Market Analyzer Column
Here are the basic steps to add the Quantum Dynamic Volatility in the Market Analyzer:
Make sure valid rows are present in the Market Analyzer window.
Right-click anywhere in the Market Analyzer window then select “Columns…” in the context menu.
The Columns window appears. In the Available section, go to QuantumMarketAnalyzerColumns folder then double-click the Quantum Dynamic Volatility to add the indicator as one of the columns in the Market Analyzer.
Set the timeframe of the indicator in Properties > Data Series section with the following user inputs:
Type – select a time-based series such as Minute or Day
Value – set the interval for the type of series selected above
After you have finished all your configurations, click OK to confirm your chosen settings and to add the indicator as a column in your Market Analyzer window.
Column Options
The Quantum Dynamic Volatility in the Market Analyzer displays only 1 type of signal, so it does not have a Column property.
- Volatility – displays the number of bars passed since the volatile candlestick was detected.
Tip: You can change the Label property of the column to describe what type of signal you choose to display.
