Investopedia.com describes volatility as the amount of uncertainty or risk related to the size of changes in a security’s value. In order to make profit, traders need volatility. An asset that doesn’t move will incur opportunity cost.
The Alpha-Omega Volatility Index gives you precise control over how sensitive it is to volatility. You can crank it all the way up to aggressive to get more signals if you want to trade more. Or you can set it to ultra conservative and only trade the best signals. There is also moderate and conservative settings for something more in the middle. This allows you to adapt it to your specific trading strategy.
This indicator has dots that increase the stronger the volatility is. An alpha or omega symbol appears when the most robust volatility is expected. By keeping an eye on it, you can get ready to jump in or out depending on your trading plan.
One way to use it is to time reversals. When you have a bullish movement and you see high negative volatility appearing in the Alpha-Omega Volatility Index, it means a strong reversal/spike is coming. The same goes for bearish reversals, but with just the opposite logic.
In the USDJPY chart, you can see an omega appear indicating a strong volatile move downwards. The bearish dots start to decrease as it reaches the bottom and the bullish dots start to increase, which eventually leads to an alpha.
One careful thing to note is that an alpha or omega alone is not a safe signal. Combine it with other confirmations for maximum effectiveness.
The interest zones indicate areas to pay attention before a big move happens. You can change it to be more aggressive, conservative, or off in the settings.