What It Does

This lightweight indicator calculates the Average True Range (ATR) — the classic measure of market volatility — and displays a colored box on your chart showing the current ATR value and volatility state:

• Low Volatility — the market is quiet, ideal for scalpers or range strategies
• Medium Volatility — movement is picking up, conditions are normal
• High Volatility — price swings are wide, risk and reward both rise

Colors and thresholds are fully customizable, so you can fine-tune it to any instrument or timeframe. The indicator also includes a PropTraderz watermark and quick access to our Discord community for support, updates, and shared setups.

How It Works

The logic behind it is simple but powerful:

• ATR is calculated using Wilder’s smoothing formula.
• The result is compared to your two thresholds — Lower and Upper.
• Below the lower level = Low Volatility.
• Between them = Medium Volatility.
• Above the upper level = High Volatility.

For example, on the Nasdaq (NQ) 5-minute chart:
Typical ATR(14) hovers between 10–30 points.
A good starting setup is Lower = 15, Upper = 25.
When ATR breaks above 25, you’re likely in a trending, fast-moving environment — think breakout momentum or news volatility.

Why It Matters

Most traders focus on direction — up or down — and ignore speed.
But volatility often dictates what kind of trade has the edge:

• Low volatility favors mean reversion and small scalps.
• High volatility favors momentum and breakout entries.
• Medium volatility often marks transition zones where new trends start.

By watching volatility as a state, not a number, you can instantly shift your playbook instead of getting caught in the wrong gear.

If you find it useful, support the community by using our prop-firm partner code:

PROPTRADERZ

Works with Lucid Trading, Bulenox, Earn2Trade etc