Scalpers Volatility Filter: A Tool for Day Traders

The indicator on TradingView, Scalpers Volatility Filter, helps scalpers identify optimal market periods for consistent profit.

### Scalpers Volatility Filter: A Powerful Indicator for Professional Traders
* 📊 The Scalpers Volatility Filter is a custom indicator designed for lower time frame trading, particularly for **scalping and day trading strategies**.
* 🔍 It combines **volatility and momentum indicators**, using two ATRs, a modified and smoothed version of ADX, and linear regression to assess **market conditions**.
* ⚙ The indicator appears as an oscillator with a center line at zero, with **gray, blue, and purple signs** indicating different levels of **volatility and momentum**.
* 📈 When the indicator is below the center line and gray, it suggests **low volatility and momentum**, indicating a **flat, ranging market**.
* 🌊 When the indicator is above the center line, it signifies **increased volatility and momentum**, potentially indicating a **trending market**.
* 📊 The Scalpers Volatility Filter is best used as a filter for **trend-following or breakout strategies**, helping to avoid **false signals** in non-trending markets.
* 📉 It should be used in conjunction with other indicators or technical analysis tools, such as the **Commodity Channel Index (CCI)** for **trend confirmation**.
* 🛡 Risk management is crucial when using this indicator, with the **1% rule** recommended for scalping and day trading to **limit potential losses**.

In this video, I want to introduce a special indicator on TradingView that is for professional scalpers. To add this amazing indicator to our chart, here we click on Indicators and we search Scalpers Volatility Filter. This one, which is written by Quantra System. All right, this is the indicator, and as you can see, it's added here below the chart. This indicator is specifically designed for trading on lower time frames, so it's suitable for scalping and day trading strategies. As you know, when you are trading on lower time frames, you encounter more noises, so having an indicator that can help you with optimal periods in the market with high and stable volatility and momentum is a great help for scalpers to make consistent profit. This indicator is a mix of volatility and momentum to give you signals about market condition, if the market is trending or it is not trending and ranging. It uses two ATRs, a modified and smoothed version of ADX, and also linear regression to simultaneously measure volatility and momentum in the market. All right, now let's see how we

interpret this indicator and how we use it for trading. Just make sure you watch this video until the end because I'm going to teach you a trading strategy based on this indicator, which is highly profitable. All right, as you can see, the indicator is in the form of an oscillator with the center line, which is at zero, and the indicator line, which is in the form of plus signs, is moving above and below the center line. But we don't interpret this indicator like other oscillators, and it's more like ADX if you know it. When the indicator is below the center line, the signs are in gray color, and this shows low volatility and low momentum in the market. If you check the price action, you can clearly see that when we have the indicator below the center line and in gray color, the market is in a trading range and moving flat. In other words, the market is not trending like here in this part or here in this part. We have also a flat market in this part and also in this part. So whenever we have the indicator below the

center line, and in gray color, we shouldn't enter any position because the market is in a trading range and moving flat. This indicator is a perfect filter for your Trend-following strategies because in Trend-following strategies, the majority of false signals happen when the market is not trending, and this indicator helps you to filter the false signals and stay out of the market when the market is in the condition of low momentum and volatility. This low volatility and momentum situation of the market, which is reflected on the price chart in the form of a flat Market, can also be used in breakout strategies where you want to find breakouts of consolidation or range market. So, this indicator can also be used in your breakout trading strategies, especially it's good to match with price action analysis to find range markets and consolidation periods before breakout in either Direction. All right, now let's see what is the signal when the indicator is above the center line. When the indicator closes above the center line, it changes from Gray to blue and purple, and this

shows we have increased momentum and volatility in the market, but please pay attention that it doesn't tell you anything about direction. This only shows that we are out of the range market, and we have increased momentum and volatility, and the market is trending in one direction, up or down. The changes in the strength of the movement is shown by different colors. When we have blue signs, it shows we have increasing momentum and volatility, but when we have purple signs, it shows we have weakening of momentum and volatility. So, these colors are not saying about direction, they are showing a strength or weakness of the movement in a shorter-term perspective. All right, now you may wonder, okay, when we have this signal, we can enter a trade because this shows increased volatility and momentum after a period of flat market. No, we can have a situation like this where we have a good movement of the price after the signal, but we can also have a situation like this where because of a sudden and very short-term increase of momentum and volatility, we get the signal from this.

indicator but instantly weakening and going back to Flat Market. As I mentioned earlier, this indicator is a perfect complimentary tool in your trading strategy to know when the market is not trending, or when there is increased volatility and momentum in the market, so you can filter the false signals or confirm the signals that you have from your trading strategy. You should never use this indicator alone, and it must be used in conjunction with other indicators or aspects of technical analysis. Let me give you an example of a trading strategy based on this indicator so you better understand. Here we click on indicators, and we search CCI, this one commodity Channel index, and then we should change the settings of this indicator. So here we go to the settings of CCI, and here for the length, we set it at 200. All right, this CCI with the settings that we made helps you with the longer-term trend of the market, especially when CCI line goes above 100 level or goes below minus 100 level. We have this probability to have a strong

and extended movement of the price in that direction. And then, by the help of this indicator, we can confirm if in that moment we have increased volatility and momentum or not. For example, here CCI line closed above 100 level, and this indicator is above the center line and blue. When this candle is closed and CCI also closed above 100 level, this indicator must also be closed in blue color. If it's in purple color, we don't take the signal because this shows weakness of momentum and volatility. At the moment that we have CCI closed above 100, we want this indicator also show Blue sign, which tells us we have increasing of momentum and volatility. So, this signal here is confirmed, and we can enter a long position at this point. When this new candle is opened, the stop loss below the previous swing low and the profit at 1.5 risk to reward ratio. Moving back on the chart, no CCI signal around here, and at this point, we got CCI closed above 100, and this indicator is also above the center line and blue so.

this signal is also confirmed, and we can enter a long position at this point. When this new candle is opened, the stop loss below the previous swing low and the profit profit at 1.5 risk to Theo ratio. Moving back on the chart, we had Crossing of CCI above 100 at this point, but this indicator is below the center line so this signal is rejected. But for this one here in this indicator, the sign is blue so here the signal is confirmed, and we can enter a long position at this point. When this new candle is opened, the stop loss below the previous swing low, and this is also a profitable trade as you can see. Moving back on the chart, here we have some Crossing of CCI above 100, but they are rejected because this indicator shows a flat market and for this crossing here at the moment that the CCI closed above 100, you can see that the indicator also closed in blue color so this is a confirmed signal and in practice, we would enter a long position at this point with the stop loss below the

previous swing low and this trade is also a profitable trade. Where the price advanced up to this point. Before this trade, there was another confirmed signal here where CCI closed above 100. And in this indicator, the sign is blue. So another long position could be open at this point with the stop loss below the previous swing low. And this trade would also be a profitable trade because you can see that the price advanced up to this point. This was just an example to show how this indicator should be used in conjunction with other indicators or as a part of a trading strategy for filtering the signals and more confirmation. Please pay attention that using this indicator will not help you to remove all of your false signals. This is not possible in reality. No indicator or strategy is capable of this. And losing positions are always part of the game no matter how much accurate is your strategy or how much experience you have. So you need to manage your risk properly. There is a risk management strategy that is called 1% rule and it's a perfect choice for scalping and day trading.

the help of this risk management strategy. Based on your stop-loss level, your position size is calculated in a way that you will lose only 1% of your trading account in case if the market goes against you and hitting your stop loss. I have a complete guide on this. The link is also placed in the description, and I highly recommend you to watch it because without a proper risk management strategy, you cannot become a successful Trader. All right, that's it. Thank you for watching this video. If you have any questions, feel free to ask and leave a comment for me. I'll answer your questions as soon as possible. If you haven't subscribed to my Channel, please subscribe and hit the Bell so you get the notifications of my new video. See you guys in next video and good luck with your Trading.

Special Indicator for Professional Scalpers! This Indicator Is Game-Changing !

Soheil PKO

Introducing the Scalpers Volatility Filter on TradingView

This indicator is designed for professional scalpers, offering optimal periods of high and stable volatility and momentum for trading on lower time frames.

It combines two ATRs, a modified ADX, and linear regression to provide signals on market conditions, helping scalpers make consistent profits.

The indicator's interpretation differs from other oscillators, using gray color and position in relation to the center line to indicate low volatility and a non-trending market, providing a valuable tool for implementing a profitable trading strategy.

The Use of the Center Line Indicator in Trading

The center line indicator is a valuable tool for filtering out false signals in trend-following strategies during low momentum and volatility.

It can also be effectively used in breakout trading strategies, especially when combined with price action analysis to identify range markets and consolidation periods.

When the indicator is above the center line, the change in colors from gray to blue and purple indicates increased momentum and volatility, but not the direction of the trend.

Traders should be cautious when interpreting the indicator's signals, as it can show both strong movements and sudden, short-term volatility.

Using the Commodity Channel Index (CCI) in Trading

The CCI is a valuable tool for identifying market trends and momentum.

It should be used in conjunction with other indicators and never alone.

By adjusting the settings of the CCI to a length of 200, traders can effectively analyze the longer-term market trend and make informed decisions.

The indicator's color and position in relation to the center line provide signals for confirming moments of increased volatility and momentum, helping traders determine entry and exit points.

Using CCI Indicator for Trading: A Practical Guide

The CCI indicator can be used to identify entry points for long positions based on specific criteria.

The indicator's confirmation signal is marked by a blue color, and it's important to set stop losses below the previous swing low.

The CCI indicator is most effective when used in conjunction with other indicators as part of a risk management strategy, as it cannot eliminate all false signals.

The Importance of Risk Management in Trading

Implementing a risk management strategy is crucial to trading success, with the recommendation to only risk 1% of your account with a stop-loss.

A complete guide on risk management is available in the video description, emphasizing its importance for becoming a successful trader.

Viewers are encouraged to subscribe to the channel for more trading tips and information.