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AI Studio Answer Guide: Future Volatility

Status: Per-family deep reference (companion to the consolidated Fusion AI Studio & ONNX User Guide) Audience: first-time AI Studio user Answer family: Future Volatility Prediction style: Regression

1. The Plain-English Question

Future Volatility asks:

“How much price movement is likely over the next N bars?”

This family is different from most of the other regression targets in AI Studio.

It is not trying to predict:

It is trying to predict:

“How much movement or risk should I expect?”

2. What Fusion Is Actually Building

Example:

Meaning:

Fusion builds a future volatility label from the next set of forward returns.

Current trainer formula:

Target_Volatility20[t] = rolling std of future returns across bars t+1..t+20

Plain-English translation:

So the label is asking about expected movement size, not expected move direction.

3. The One Important Mental Model

This family predicts how much, not which way.

That is the most important thing to understand.

A higher value means:

“The next N bars are expected to be more active / more volatile.”

A lower value means:

“The next N bars are expected to be quieter.”

It does not automatically mean:

4. Which Step 1 Settings Control This Family

This family uses the normal Step 1:

If Step 1 says:

5,10,20

Fusion can create:

Then Step 2 chooses one of those columns for one model.

Important

For Future Volatility:

5. What The Model Output Means

This is a regression family.

The correct interpretation is:

higher value = more expected future movement
lower value  = less expected future movement

Very important

This output is usually:

So if you see values like:

that can be completely normal.

6. What 0 Means Here

For Future Volatility, 0 is the floor, not the centerline.

That means:

It does not mean:

This is one of the biggest misunderstandings users can have with this family.

7. Why Traders May Like This Family

This family can still be very useful, just not as a direct entry signal.

It is often useful for:

Plain-English examples:

8. Why This Family Gets Misused

Users naturally want to turn every ONNX output into:

above 0 = long
below 0 = short

That is not correct here.

This family is not a directional forecast.

It is a:

So the right way to use it is usually:

not:

9. How This Differs From ATR-Normalized Return

These two families can feel similar because both can involve “how much movement.”

But they answer different questions.

ATR-Normalized Return

Asks:

“How far up or down do I expect price to move?”

That is directional and zero-centered.

Future Volatility

Asks:

“How much movement do I expect, regardless of direction?”

That is not directional and usually positive-only.

So if the user wants a centerline long/short score, ATR-Normalized Return is usually the right family, not Future Volatility.

10. Step-By-Step Future Volatility Walkthrough

Step A: Prepare the raw dataset

Open Export and make sure:

Step B: Create the prepared dataset

In AI Studio Step 1:

Now Fusion creates answer columns such as:

Step C: Choose the actual training question

In Step 2:

Example:

Now the model is learning:

Step D: Choose the features

Pick the inputs that may help answer:

“How active is the next period likely to be?”

Useful first feature types often include:

Good first rule:

Step E: Train

Choose:

Good first algorithms:

Step F: Read the result

The right way to think about the output is:

higher output = more expected movement
lower output  = less expected movement

Then decide how to use it, for example:

high volatility forecast = allow breakout setups / wider stops / smaller size
low volatility forecast  = prefer mean reversion / smaller targets / normal size

The exact trading use depends on your workflow.

11. Good First Session

If you want a clean first experiment with this family:

Step 1

Step 2

Step 3

Best first use

Do not deploy this first as a direct long/short signal.

Use it first as:

12. What Not To Do

Do not treat 0 as a centerline

For this family, 0 is the floor, not the midpoint.

Do not use > 0 and < 0 as long/short rules

This family does not directly predict direction.

Do not assume positive means bullish

Positive here just means more expected future movement.

Do not judge it by the same mental model as Future Return

This family is about expected activity, not expected directional edge.

13. Current Product Notes From The Future Volatility Guide Pass

These are the product improvements this guide exposes.

A. The UI should say more aggressively that this is not a direct entry target

Suggested note:

“Future Volatility is a movement/risk forecast. Use it as a filter, sizing input, or regime signal rather than a direct long/short trigger.”

B. The target catalog should emphasize that 0 is the floor

Suggested compact display:

Future Volatility
positive-only | 0 = floor, not centerline

C. The family picker should steer users toward ATR-Normalized Return when they want a centered directional score

Suggested note:

“If you want a zero-centered long/short style regression target, ATR-Normalized Return is usually a better first choice.”

14. One-Sentence Rule To Remember

Future Volatility means:

“Predict how much movement is likely over the next N bars, where higher values mean more expected activity and near-zero is the floor, not a bullish/bearish centerline.”

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