Volatility Crush Examples

Trading volatility has nothing to do with drawing trend lines on the VIX.

The next time somebody approaches you with “trading volatility”, ask them the question:

“Where is the Mean at?”

The following 3 examples are volatility crushes otherwise known as Mean Reversions. Let’s see if the mean itself can provide you with a clue for the target.

deletetxt1("Crush");  
  
for(i=1000; i>=0; i--){   
      if (((ExtATRBuffer[i+3]<3 && ExtATRBuffer[i+1]>3 && ExtATRBuffer[i]<3) ||  (ExtATRBuffer[i+3]<3.9 && ExtATRBuffer[i+1]>3.9 && ExtATRBuffer[i]<3.9) ||  (ExtATRBuffer[i+3]<4.5 && ExtATRBuffer[i+1]>4.5 && ExtATRBuffer[i]<4.5) ||  (ExtATRBuffer[i+3]<5 && ExtATRBuffer[i+1]>5 && ExtATRBuffer[i]<5)) && ExtATRBuffer[i]>2.5 ) {
            ObjectCreate("Crush"+i,OBJ_TEXT, indicator_window, Time[i+2], ExtATRBuffer[i]);
             ObjectCreate("Crush2"+i,OBJ_TEXT, indicator_window, Time[i+2], ExtATRBuffer[i]-1);
       
       if (Close[i]<iLo4[i])  {ObjectSetText("Crush"+i, " Vol Crush -> ", 19, "Impact", clrNavy); ObjectSetText("Crush2"+i, DoubleToStr(NormalizeDouble(iHi4[i],4),4), 19, "Impact", clrNavy);   }
       
       else if (Close[i]>iHi4[i]) { ObjectSetText("Crush"+i, " Vol Crush -> ", 19, "Impact", clrNavy); ObjectSetText("Crush2"+i, DoubleToStr(NormalizeDouble(iLo4[i],4),4), 19, "Impact", clrNavy);  }
         
      }      
}


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