What it does
A downside-risk measure created by Peter Martin that quantifies the depth and duration of drawdowns from recent highs. It squares the percentage drawdown on each bar over a lookback window, averages them and takes the square root, so long, deep declines produce high readings while steady advances keep the index near zero. It captures the stress an investor actually feels far better than symmetric volatility measures like standard deviation.
How to add it
Click Indicators (ƒx) in the header.
Search “Ulcer Index” and click the result.
Hover its legend row and click the gear to open settings.
How traders use it
- Low and falling Ulcer Index readings characterize smooth uptrends that are comfortable to hold; rising readings warn of deepening drawdowns.
- Compare the Ulcer Index across symbols or funds to pick the instrument that delivers returns with the least drawdown pain.
- A spike to levels well above the symbol's own historical norm flags a stressed decline, often accompanying capitulation phases.
- Use it as a filter: many trend followers avoid new longs while the Ulcer Index is elevated and rising.
Inputs
| Input | Type | Default | Range / Options |
|---|---|---|---|
| Length | number | 14 | 1–200 |
| Source | select | close | Close / Open / High / Low / HL2 / HLC3 / OHLC4 |
Plots & styling
| Plot | Style | Default color |
|---|---|---|
| Ulcer Index(14) | line | #FF9800 |
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
- Double-click the plot to open settings directly, skipping the legend hover.
- The pane keeps its height in saved layouts, so size it once and it survives reloads.
- Resize the pane by dragging its divider; collapse it from the legend row when you need the space back.
Watch out for
- It is a risk gauge, not a timing tool; it says nothing about when a drawdown will end.
- Because it only measures downside from prior highs, it stays low during parabolic advances right up until they break.