📈 Skew Volatility Bias Indicator – Professional Version (for cTrader)

Unlock a deeper understanding of market pressure, volatility imbalance, and directional conviction with the Skew Volatility Bias Indicator, the enhanced version of a classic volatility-based approach originally inspired by Pine Script and now fully optimized for cTrader.

This tool helps traders visualize which side of the market is hitting harder — buyers or sellers — by measuring volatility asymmetry and converting it into a clear, easy-to-read signal.
Whether you're trading indices, forex, commodities or crypto, this indicator serves as a powerful trend filter, regime detector, and bias confirmation tool.

1. What the Skew Indicator Measures

The indicator evaluates the balance of volatility between bullish and bearish candles.
It calculates a normalized True Range and feeds it into two adaptive averages:

• Deviation Max → volatility produced during up candles
• Deviation Min → volatility produced during down candles

Then it computes:

👉 Skew = DeviationMax / DeviationMin

This converts raw volatility into a clear directional reading:

• Skew > 1 → upside moves are stronger on average
• Skew < 1 → downside moves are stronger
• Skew ≈ 1 → volatility is symmetrical and the market is balanced

In short:

Skew reveals which side has “volatility dominance”.

2. Understanding the Lines

1. Skew (Raw) – Red line

The pure volatility ratio. This is the core signal.

2. Skew Above 1 – Green line

Shows bullish volatility dominance.

3. Skew Below 1 – Yellow line

Shows bearish volatility dominance.

4. Threshold 1.0 Line – Blue dotted line

Represents equilibrium.

5. Skew Oscillator (log) – White line

More stable, smoother representation:

• above 0 = bullish volatility
• below 0 = bearish volatility

3. How to Read It

A) Market Regimes

🔹 Bullish Regime

• Skew > 1
• Green line active
• Oscillator above zero
  → Market favors longs.

🔹 Bearish Regime

• Skew < 1
• Yellow line active
• Oscillator below zero
  → Market favors shorts.

🔹 Neutral

• Skew ≈ 1
  → Market balanced, suitable for range trading.

4. Regime Shift Signals

Skew crossing above 1

→ Buyers gain volatility dominance
→ Bullish transition

Skew crossing below 1

→ Sellers gain volatility dominance
→ Bearish transition

These shifts often occur before price action confirms a trend, making Skew a powerful early indicator.

5. Practical Use Cases

1️⃣ Trend Filter for cBots

• trade long only when SkewOsc > 0
• trade short only when SkewOsc < 0

2️⃣ Trend Quality Confirmation

• Uptrend + Skew > 1 = strong trend
• Uptrend + Skew falling toward 1 = weakening trend

3️⃣ Market Sentiment / Risk Filter

Particularly effective on indices and FX major pairs.

6. Summary

• What it shows: volatility dominance
• Why it matters: volatility shifts precede price shifts
• How to use it: as a filter, confirmation tool, or sentiment gauge
• Best part: extremely light, fast, and adaptable