Trend-based informational signal indicator Volatility Quality Index displays the sections of up/down trends.

It has four adjustable parameters:

• Period – calculation period
• Method – calculation method
• Smoothing – smoothing period
• Filter – filter size

Calculations:

If VQ > 0
The trend is up - a green signal pointer is placed
Otherwise
The trend is down - a red signal pointer is placed

where:

If (Abs(VQnew) < Filter
VQ = PrevVQ
Otherwise
VQ = VQnew

VQnew = Abs(((Close - C2) / Max + (Close - Open) / (High - Low)) * 0.5) * ((Close - C2 + (Close - Open)) * 0.5)

Max = Maximum(High - Low, Maximum(High - C2, C2 - Low))

Open = MA(Open, Period, Method)
High = MA(High, Period, Method)
Low = MA(Low, Period, Method)
Close = MA(Close, Period, Method)

C2 = Close Smoothing bars ago