Playbooks

What it is

Volatility clusters: quiet periods are followed by quiet periods until they are not, and expansions come in bursts. Knowing the regime tells which methods fit (ranges in compression, trends in expansion) and how wide a scenario's distances need to be.

What to look for

• Level. analyze_asset gives annualized volatility and a volatility chart; get_candles.structure gives the ATR. Compare today's values with the asset's own last few months, not with another asset.
• Compression. ATR near its lowest in the window, Bollinger bands narrow in the analyze_asset snapshot, and a tightening range of candles. Compression ends in expansion; the direction is unknown.
• Expansion. ATR well above its average and wide candles. Late in an expansion, ranges stop widening.
• Cross-asset. compare_assets with a benchmark: is the volatility the asset's own, or the whole market's?

How to mark it

• zone kind range around the compression range, labelled Squeeze.
• level for the range's high and low, which a breakout would leave.
• marker on the first wide candle that broke the compression, labelled Expansion.
• position only when a concrete scenario is discussed, with distances in ATR.

Scenario logic (analysis, not advice)

• Compressed: describe both breakout directions with their invalidation inside the range; neither is favoured until price leaves it.
• Normal: use the method the user chose, with stops about one and a half to two ATR away.
• Expanded: distances widen; a scenario sized for normal volatility is likely to be stopped by noise. Say that targets are often reached faster and reversals are sharper.

Invalidation

The regime read changes when ATR crosses its own average, or when price breaks out of the compression range and closes outside it.

Pitfalls

A low reading is not a forecast of a move up or down. Volatility measured on a short window swings a lot; say the window used.