What it does
Historical Volatility (HV) measures how much an instrument's price has actually fluctuated over a past window, expressed as an annualized percentage. It is computed as the standard deviation of the logarithmic daily returns over a lookback (commonly 10 to 30 bars), scaled by the square root of the number of trading periods in a year (about 252 for daily data). A reading of 30 means returns have varied at a pace consistent with a 30 percent annualized move.
How to add it
Click Indicators (ƒx) in the header.
Search “Historical Volatility” and click the result.
Hover its legend row and click the gear to open settings.
How traders use it
- Use HV to size positions and set stops: wider stops and smaller size when HV is high, tighter stops and larger size when HV is low.
- Very low HV relative to its own history often precedes expansion; a volatility squeeze can be traded as a breakout setup with direction taken from price action.
- Options traders compare HV to implied volatility: IV well above HV suggests options are relatively expensive, IV below HV suggests they are relatively cheap.
- Compare current HV to its percentile over the past year rather than to a fixed number, since normal volatility differs greatly between instruments.
Inputs
| Input | Type | Default | Range / Options |
|---|---|---|---|
| Period | number | 10 | 1–500 |
Plots & styling
| Plot | Style | Default color |
|---|---|---|
| HV | line | #2196F3 |
Every plot's color, line width and visibility can be changed on the Style tab. Precision (default 2 decimals), price-scale labels and status-line values are configurable at the bottom of the Style tab.
Tips
- Reference levels (where the study has them) are editable — tune them to the instrument you're trading.
- Hide the study from the legend eye instead of removing it when you only want it out of the way temporarily.
- Merge multiple oscillators into one pane from the legend ⋯ menu to compare them on a shared axis.
Watch out for
- HV is entirely backward-looking and says nothing about direction; a calm history does not prevent a sudden gap or news-driven move.
- The reading depends heavily on the chosen lookback, and a single extreme bar inflates it for the whole window before abruptly dropping out.