This filter looks at an instrument's volatility (the ups and downs of its price) to determine whether it will be bought or sold. This is good for example if you want to trade highly volatile, thus risky instruments, in the hope of generating higher returns (but beware of greater drawdowns).
The reverse is also true, i.e. if you want to trade only stable instruments, thus reducing risk.
Now, about this filter's parameters:
1. The first parameter defines the period of time in which the volatility is calculated. Let's say you want to know a stock's volatility based on a period of 3 months, then input a value of 3 months here (type the value, then choose from the dropdown either Days or Months).
This means you're looking at the instrument's volatility calculated from today until 3 months ago (averaged).
2. The second parameter defines whether the instrument's volatility must be “Less than” or “Greater than” the threshold volatility.
You may also choose “Between” or “Not between” the volatility values, thus you must set the minimum and maximum volatility values on the next two parameters that show up.
“Between” means the instrument's volatility must fall within the Min and Max values, while “Not between” means the instrument's volatility must fall outside the Min and Max values (you're looking at either very volatile or very stable instruments).
3. The third parameter defines the threshold volatility value. So for example, an instrument whose 3 months volatility is greater than this value will not be considered as a Buy, etc. This value is stated in percent, from 0 to 100. Higher percentage means higher volatility, and vice versa.
A high volatility reading means the price is fluctuating wildly (it goes up or down quite far); whereas low volatility indicates a stable price movement (day-to-day prices are not too different from each other during that period). This indicator immediately changes appearance when you change this filter's period parameter.