Volatility Expansion (STD): The Phoenix Rising
While Mike Bollinger Bands and BBW Expansion indicate the widening of our momentum bands, the VOLMIKE.COM system goes a step further to quantify the intensity of this expansion. We do this through Volatility Expansion detected by Standard Deviation (STD) alerts, a powerful signal we visualize as the "Phoenix Rising" (🐦🔥) emoji. This provides a deep nuance into how explosively momentum is accelerating.
Beyond the Bands: What is STD Expansion?
Standard Deviation (STD) is a statistical measure of dispersion, showing how much data points deviate from their average. In our system, we apply this to Volatility Mike, generating F%_STD – the 9-period rolling Standard Deviation of Mike. This tells us how volatile Mike's daily percentage changes have been recently.
STD Expansion identifies moments when this F%_STD has increased dramatically relative to its own recent history. It's not just about volatility being high; it's about volatility itself exploding.
Calculating the Pulse: F%_STD & STD Ratio
Our system calculates STD Expansion through these steps:
- F%_STD: We calculate the 9-period rolling Standard Deviation of Mike. This gives us a continuous measure of how much Mike's values are dispersing from its own average.
- STD Anchor: We then compare the current F%_STD to its value from a previous point (a
lookback_stdof 5 periods). This "STD Anchor" serves as our historical reference for comparison. - STD Ratio: The core of the signal is the STD Ratio, calculated as: $$\text{STD Ratio} = \frac{\text{Current F%_STD}}{\text{STD Anchor}}$$ This ratio tells us how many times the current momentum volatility is greater than its volatility 5 periods ago.
The Phoenix Rising (🐦🔥): Visualizing the Surge
The "Phoenix Rising" (🐦🔥) emoji appears on the chart to visually signal a significant STD Expansion:
- The "Phoenix Rising" (🐦🔥) emoji is plotted when the STD Ratio is greater than or equal to 2.
- A ratio of 2 (or greater) indicates that the current volatility of Mike's momentum is at least double what it was 5 periods ago (a "Double STD Expansion").
- A ratio of 3 (or greater) signifies that Mike's momentum volatility is at least triple its level from 5 periods ago (a "Triple STD Expansion").
Both "Double" and "Triple" STD Expansions are powerful indications of a rapid surge in momentum's dispersion, justifying the appearance of the "Phoenix Rising" emoji.
Why This Matters: The Nuances of Volatility
STD Expansion offers critical nuances beyond what Mike Bollinger Bands alone might show:
- Rate of Volatility Change: It doesn't just show the bands are wide; it shows how quickly they've widened. This is a measure of the acceleration of momentum's dispersion.
- Confirms Intensity: It provides a strong confirmation of the intensity of an explosive move, often validating the force behind a BBW Expansion.
- Filters for True Explosions: By requiring a significant relative increase in STD, it helps distinguish genuine, powerful surges from mere increases in normal volatility.
Importance for Marengo Setups
Volatility Expansion through STD is an invaluable layer of confirmation for our "Marengo" setups. When a "Marengo" signal occurs alongside the "Phoenix Rising" (🐦🔥) emoji, it provides exceptionally high conviction that the underlying price move is backed by an extreme, accelerating surge in momentum volatility. This combination helps us identify the most powerful and sustained high-velocity opportunities, aligning with our "Volatility Perfection" philosophy.