What it does
This is a close-to-close historical volatility estimator that assumes a zero mean return. It computes returns from close to close, but instead of measuring dispersion around the average return it measures dispersion around zero (root mean square of returns), usually annualized. Dropping the drift term makes it slightly more responsive for short lookbacks where an estimated mean is unreliable.
How to add it
Click Indicators (ƒx) in the header.
Search “Volatility Zero Trend Close-to-Close” and click the result.
Hover its legend row and click the gear to open settings.
How traders use it
- Read it as a volatility regime gauge: rising values mean daily swings are growing; falling values mean the market is quieting down.
- Very low percentile readings versus the instrument's own history mark compression that often precedes larger directional moves.
- Use it to compare risk across instruments on a like-for-like basis, since it is expressed as an annualized percentage.
- Options-inclined traders compare it with implied volatility: realized far below implied suggests options are rich; far above suggests they are cheap.
- Scale stops and position sizes with it the same way you would with ATR-based measures.
Inputs
| Input | Type | Default | Range / Options |
|---|---|---|---|
| Periods | number | 10 | 0–10000 |
| Days Per Year | number | 252 | 1–366 |
Plots & styling
| Plot | Style | Default color |
|---|---|---|
| Plot | 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
- Resize the pane by dragging its divider; collapse it from the legend row when you need the space back.
- Use Add to favorites in the legend menu; starred studies surface at the top of the picker.
- Reference levels (where the study has them) are editable — tune them to the instrument you're trading.
Watch out for
- The zero-drift assumption overstates volatility for strongly trending instruments, because steady drift gets counted as dispersion.
- Close-to-close sampling ignores intrabar ranges, so it can understate turbulence on days with big wicks but small net change.