The Volatility Stop indicator is a powerful technical analysis tool that plots red dots above price bars in case of a downtrend and green dots under price bars in case of an uptrend.

These levels can be used as trailing stops, making this overlay suitable as a technique to time your exits on open trades. It can also be used to detect uptrends and downtrends, because price crossing the plotted level could point to a trend reversal.

Volatility Stop uses the True Range for its calculation and is often used in combination with other signals and analysis techniques.