L&S Volatility Index Refurbished

The L&S Volatility Index measures the volatility of price in relation to a moving average.

The indicator can be accessed for free on the TradingView platform.

The indicator was originally described by Brazilian traders Alexandre Wolwacz (Stormer) and Fábio Figueiredo (Vlad) from L&S Educação Financeira.

Basically, this indicator can be used in two ways:

1. In a mean reversion strategy, when there is an unusual distance from it;
2. In a trend following strategy, when the price is in an acceptable region.

As an indicator of volatility, the greatest utility is shown in first case.
This is because it allows identifying abnormal prices, extremely stretched in relation to an average, including market crashes.