VolatilityCone by ImpliedVolatility Pro

VolatilityCone by ImpliedVolatility Pro

What this indicator does

VolatilityCone by ImpliedVolatility Pro draws a volatility cone starting from a date you choose. The cone shows a realistic price range the market could move within over time, based on implied volatility.
In simple terms: it helps you see whether the current price action looks normal, stretched, or extreme compared to what the market is “pricing in”.

It also displays a Price Z-Score in the status line, which is an easy way to judge if price is currently trading closer to the upper or lower side of the expected range.

How to use it

Set the StartDate
Pick the date where you want the cone to begin (for example: the start of a new swing, a breakout, or the beginning of a new trading period).

Choose your implied volatility source

Use IV by Symbol (recommended): the cone uses implied volatility from a volatility symbol (commonly VIX for US markets).

Manual IV: enter your own implied volatility value if you prefer, or if your market doesn’t have a good volatility index.

Read the cone

When price is inside the cone, movement is generally within the “expected” range.

When price reaches or pushes toward the outer cone areas, it can indicate the move is becoming extended relative to implied expectations.

The mean line helps you visualize a central tendency / baseline path.

Practical ways traders use it

Context for trend moves: Is the trend still within a normal volatility expansion, or is it getting overstretched?

Risk awareness: Outer cone areas can help you identify zones where risk increases (chasing becomes dangerous, or mean-reversion becomes more likely).

Planning scenarios: The cone can support “if price moves here, it’s still within expectation” vs. “beyond here, it’s unusual”.

Note: This tool does not produce buy/sell signals by itself. It’s best used as a framework for expectation and risk, alongside your own strategy.

Who this is for

This indicator is suitable for:

Swing traders who want a clean expectation range for the next weeks/months.

Position traders who need volatility-based context for larger moves.

Options traders who think in implied volatility terms and want a visual range on the chart.

Risk-focused traders who want to avoid entering when price is already statistically stretched.

Not ideal for:

Very short-term scalping where you need ultra-fast microstructure signals.

Tips for best results

Use a StartDate that matches a meaningful market point (new trend leg, breakout, earnings week, macro shift).

If you trade non-US markets, consider using a relevant local volatility index (if available) or manual IV.

Combine with your usual confirmation (structure, support/resistance, volume, trend filters) for better decision quality.