In “Within The Volatility Band” in this issue, Sylvain Vervoort presents the fourth part of a seven-article series on indicator rules for a swing trading strategy (IRSTS). This month, he defines his volatility band indicator and explains some of the appropriate uses for it. The SVE volatility bands are shown in Figure 17.
FIGURE 17: EXCEL, VOLATILITY BANDS. This sample chart shows the default volatility bands with zigzag.
This month’s Excel spreadsheet updates the one I presented last month for part 3 of Vervoort’s series to add the volatility band indicator.
FIGURE 18: EXCEL, DEVIATION FACTOR OF 1. This chart shows the volatility bands with a deviation factor of 1, similar to Figure 4 from Sylvain Vervoort’s article in this issue.
Figure 18 shows volatility bands with a deviation factor of 1. Vervoort suggests that this setting can be used to define buy & sell triggers:
Buy: Closing price crossing above the upper band.
Long continues largely above the V median.
The lower band serves as a stop-loss level.
Sell: Closing price crossing below the lower band.
Short continues largely below the V median.
The upper band serves as a stop-loss level.
The spreadsheet file for this Traders’ Tip can be downloaded here. To successfully download it, follow these steps:
- Right-click on the Excel file link, then
- Select “Save target as” to place a copy of the spreadsheet file on your hard drive.