Volatility Bands

The Volatility Bands script is a custom indicator designed to help traders visualize volatility levels in the market. It calculates dynamic bands around a central moving average, providing insights into potential support and resistance levels based on recent price action.

The script calculates multiple volatility bands (u0, u1, u2, d0, d1, d2) that adjust based on recent price movements. The outer bands (u2 and d2) represent extreme volatility levels, while the inner bands (u0, u1, d0, d1) indicate more immediate support and resistance.

Look for price reactions at the band levels. A touch of the upper bands may indicate overbought conditions, while a touch of the lower bands may indicate oversold conditions.

Central Moving Average: A smoothed moving average that adapts to price changes, providing a clear trend direction.

The script has no input parameters.

Script Functions:
erf(x): Calculates the error function for a given input x. Used in the calculation of the smoothing factor for the UMA.
uma(input): Provides a smoothed average that adapts to recent price changes, reducing lag compared to traditional moving averages.
dev(input, mu): Used to calculate the volatility bands around the central moving average.