Indicator Overview
This indicator computes volatility as the standard deviation of close-to-open differences over a user-defined lookback. It then builds a seasonal profile by tracking a rolling average of that volatility for each calendar month. The result is two lines: a fast Volatility line that reacts to current conditions, and a Seasonal Average line that reflects the typical level for the current month.
Background & History
Seasonality studies show that markets often display recurring behaviour tied to calendar effects, from earnings cycles and tax deadlines to holiday periods and commodity harvest seasons. Rather than modelling price direction, this tool focuses on the magnitude of movement, using a simple dispersion metric and comparing it against month-based norms.
How the Indicator Works
On every bar, the indicator measures intrabar change as Close − Open for the last Period bars, computes its standard deviation, and plots that as Volatility. It simultaneously updates a month-specific rolling average of that volatility and plots it as the Seasonal Average for the current month.
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Highlights when today’s volatility is above or below the typical level for this month.
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Uses a rolling window per month to keep the seasonal line adaptive.
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Works on any timeframe and symbol since it uses raw price differences by default.
Key Features
You get a fast snapshot of current volatility versus a month-aware baseline so that you can adapt risk and tactics without guesswork.
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Two plots, current Volatility and month-specific Seasonal Average.
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Simple, transparent calculation, easy to validate.
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Suitable for timing breakout versus mean-reversion tactics.
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Non-overlay panel for clean chart layouts.
How to Use it for Trading (at a glance)
Use the gap between Volatility and Seasonal Average as context. When Volatility rises meaningfully above the seasonal line, favour breakout, momentum, or wider-stop strategies. When it sits below the seasonal line, consider mean-reversion, range tactics, or tighter stops. Combine with your trend filter or session rules to avoid news-driven outliers.
Inputs & Parameters
These settings control the volatility lookback and reserve a future smoothing control.
| Parameter |
Default / Type |
Description |
| Inputs |
| Period (Days) |
30 (int) |
Lookback length in bars for volatility calculation based on Close − Open differences. |
| Smoothing |
5 (int) |
Reserved for optional smoothing of the seasonal profile in future updates. |
Formulas
Below is a faithful, code-accurate description of the computation.
1) Intrabar change series (last Period bars):
Δi = Close[t − i] − Open[t − i], for i = 0 … Period − 1.
2) Mean and variance of changes:
μ = (1 / Period) · Σi=0..Period−1 Δi
Var = (1 / Period) · Σi=0..Period−1 (Δi − μ)2
3) Current volatility (plotted as “Volatility”):
σ(t) = √Var.
4) Month index and rolling slot:
m = Month(OpenTime[t]) − 1 (0 = Jan … 11 = Dec)
k = t mod Period.
5) Update the month bucket and compute the seasonal average (plotted as “Seasonal Average”):
Bucket[m][k] ← σ(t)
SeasonalAvg(t) = (1 / Period) · Σj=0..Period−1 Bucket[m][j].
Advantages
Fast, transparent, and easy to interpret, this indicator shows whether current conditions are abnormally active or unusually quiet for the current month. It helps align risk controls with regime, improves stop and target placement, and guides the choice between momentum and mean-reversion tactics without overfitting.
Disadvantages
Because it uses raw price differences, the absolute scale varies between symbols and timeframes, and early samples in a new month can be influenced by partially filled buckets. Shocks and structural changes can also break historical seasonal patterns, so treat the seasonal line as context, not a signal on its own.
How To Install & Remove
First, ensure that you have the cTrader trading platform installed. Then, unzip the file and double-click it to install the platform automatically.
Help Using This Indicator
If you need help using this indicator, try asking cTrader Sensei, our free AI assistant dedicated to the cTrader platform, rated 4.9 out of 5 in the ChatGPT Store. It can guide you through setup, usage, and troubleshooting with clear, step-by-step support.
If you still need assistance, feel free to post your question on our product support forum, where our team and community can help.
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