Wilder Volatility in Technical Trading Systems

Wilder Volatility
In the book "New Concepts in Technical Trading Systems, J. Welles Wilder Jr. talks about volatility and describes his Volatility Index and Volatility system. Both of these can be done in MetaStock â ¢ for Windows. This document describes how to and construct the index system.
Volatility Index (VI) is described by Wilder as:
VI Today = (13 * VI Prev + TR1) / 14 * TR1 the exact range of today.
He defines the right choice as the greatest of the following:
1st The distance from today's high to today's low
2nd The distance from yesterday to close higher today, or
3rd The distance from yesterday close to date is low.
In MetaStock version 5.0 or higher will use the following function.
VI Today = ATR (14)

The instability of the system is:
Enter Long
Cross (C, Ref (LLV (C, 7), -1) + (Ref (ATR (7) -1) * 3));
Enter a short
Cross (Ref (HHV (C, 7), -1) - (Ref (ATR (7) -1) * 3), c)