The Vix Fix indicator was created by Larry Williams and is one of my giant backlog of unpublished scripts which I'm going to start publishing more of. This indicator is a great synthetic version of the classic Volatility Index and can be useful in combination with other indicators to determine when to enter or exit a trade due to the current volatility. The indicator creates this synthetic version of the Volatility Index by a fairly simple formula that subtracts the current low from the highest close over the last 22 days and then divides that result by the same highest close and multiplies by 100 to turn it into a percentage. The 22-day length is used by default since there is a max of 22 trading days in a month but this formula works well for any other timeframe. By itself, this indicator doesn't generate buy or sell signals but generally speaking, you will want to enter or exit a trade when the Vix fix indicator amount spikes and you get an entry or exit signal from another indicator of your choice. Keep in mind that the colors I'm using for this indicator are only a general idea of when volatility is high enough to enter or exit a trade so green colors mean higher volatility and red colors mean low volatility. This is one of the few indicators I have written that don't recommend to buy or sell when the colors change.
This was a custom request from one of my followers so please let me know if you guys have any other script requests you want to see!
Hello thank you. does it make sense to change the timeframe via parameter? You write " The 22-day length is used by default since there is a max of 22 trading days in a month but this formula works well for any other timeframe." but the colors are only changed to green/red when I use day timeframe e.g. in hour all color is red
cheatcountry
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@KatzeRothiDieErste, So I will try to fix the colors using a different method but the reason why you see all red on lower timeframes is because the volatility is low since the volatility calculation is done by calculating a percentage of the difference on the range between highest close and the current bar's low. On a lower timeframe, this range isn't as pronounced as higher timeframes so you would look for relative spikes in the volatility and I will probably change the colors to calculate this relative difference in volatility vs a hardcoded number like I'm currently doing. I know this is a bit of a long explanation but hope it helps explain what is going on