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  • The Most Volatile Currency Pairs and How to Trade Them

    From dailyfx.com

    FX markets are susceptible to a range of factors which affect their volatility, and many traders look to tailor their strategies to capitalize on the most volatile currency pairs. Currency volatility, often measured by calculating the standard deviation or variance of currency price movements, gives traders an idea of how much a currency might move relative to its average over a given time period. Traders can also gauge volatility by looking at a currency pair’s average true range or by looking at range as percent of spot. The higher the level of currency volatility, the higher the degree of risk, and vice versa. ... (full story)

AUD/USD volatile currency pair? You’ve got to be kidding me. This is one of the most sleepy pairs in the FOREX industry. It’s trending yes, but not volatile.
Further down the list - there’s nothing called AUD/GBP. it’s GBP/AUD.

Fishy article. No value. Wasting of time.
Start with 1000$. Increase by 3% every day. After one year 2 213 314$
The higher the level of currency volatility, the higher the degree of risk, and vice versa.........

perfect example of the definition of a market..... 2 people looking at the exact same thing with opposite views......

and i bet with less than 100 lines of code i could visually prove mine on every metatrader 4 platform in the world......

volatility and risk are not necessarily linear..... look deeper...... do the math.....h
to trade and code, keep both simple... no call to impress....h
EURUSD is the most volatility pairs
Quoting hayseed
The higher the level of currency volatility, the higher the degree of risk, and vice versa......... perfect example of the definition of a market..... 2 people looking at the exact same thing with opposite views...... and i bet with less than 100 lines of code i could visually prove mine on every metatrader 4 platform in the world...... volatility and risk are not necessarily linear..... look deeper...... do the math.....h
Absolutely true.
A market with no volatility is simply account killer. You need volatility in order to hit your target and hence to generate profits. No volatility leads to frustration and taking bigger risks which eventually will blow your account when the sudden move occurs. In the end of the day a good MM is the savior.
Start with 1000$. Increase by 3% every day. After one year 2 213 314$
USDZAR is a volatile pair in my 10 yrs experience,almost its account killer............
@NotAtrader & Jubizman02
the writer of this article is right....you dont look at the absolute numbers, but even now the 25-day ATR numbers and certainly the % (volatility) are lower than the others: E/U = 61 = 0.505%, U/CH 56 = 0.61%, E/G 51= 0.59%...
now look at the 25-day ATR and % for the high volatile pairs: A/J 73 = 0.865%, N/J 68 = 0.87%, A/U 68 = 0.87%, C/J 70 = 0.80% and G/A 125 = 0.70%....
you better do your homework first before discrediting people.........
Quoting yonnie
@NotAtrader & Jubizman02 the writer of this article is right....you dont look at the absolute numbers, but even now the 25-day ATR numbers and certainly the % (volatility) are lower than the others: E/U = 61 = 0.505%, U/CH 56 = 0.61%, E/G 51= 0.59%... now look at the 25-day ATR and % for the high volatile pairs: A/J 73 = 0.865%, N/J 68 = 0.87%, A/U 68 = 0.87%, C/J 70 = 0.80% and G/A 125 = 0.70%.... you better do your homework first before discrediting people.........
I do my home work every time I need to and I can see that from the size of my accounts. Unfortunately it looks like you don’t do your math work properly and your approach to analyze market’s volatility sucks. Calculating volatility as a percentage is simply useless. When you say 0.78%, you don’t consider the fact that percentage calculations are relative. 1% of 100 pips is 1 pips while 1% of 1000 pips is 10 pips. Two completely different assets can both have 0.78% volatility but the question is compared to what. It all depends on the period as a parameter and the timeframe too. ATR calculates the volatility based on what you see on the left side of the current price which means if the recent range has been 100 pips on one asset and a 1000 pips on another asset they both can have 0.87% volatility but the count of pips on the second asset is 10 times bigger than the first asset and you as a trader need to know the range in pipsps in order to calculate your MM and to make profit. So yes the article is wrong and useless and so are you as an analyst.
Start with 1000$. Increase by 3% every day. After one year 2 213 314$
Quoting yonnie
@NotAtrader & Jubizman02 the writer of this article is right....you dont look at the absolute numbers, but even now the 25-day ATR numbers and certainly the % (volatility) are lower than the others: E/U = 61 = 0.505%, U/CH 56 = 0.61%, E/G 51= 0.59%... now look at the 25-day ATR and % for the high volatile pairs: A/J 73 = 0.865%, N/J 68 = 0.87%, A/U 68 = 0.87%, C/J 70 = 0.80% and G/A 125 = 0.70%.... you better do your homework first before discrediting people.........
You are indeed correct in presenting volatility in percentage terms. I just checked, and the AUDUSD is in the vicinity of 10%, which sort of resembles 0.87%, but it depends on calculations - volatility is at best only estimated, with a variety of methods to calculate "it".

I'm guessing that is it simply the number by which you multiply the raw number? About 10% is my raw number multiplied by 100. I don't wish for this to be a lesson in how to calculate volatility. Except for this slight tangent (you may stop reading now) -

As to comparing the volatility of currencies across time, I'll leave that as I would assert that volatility is not well designed to be averaged in any meaningful manner. There is much research into whether there is a "floor" on an assets volatility, on top of this is the day to day variations. Its academic GARCH and variants thereof. Hull presents an introduction in his reference book on options, I forget the name.
Quoting NotAtrader
{quote} Absolutely true. A market with no volatility is simply account killer. .
A market with no volatility is a horizontal straight line.
Quoting LloydOz
{quote} A market with no volatility is a horizontal straight line.
Exactly the reason why it is account killer. Inexperienced traders get frustrated and impatient and over-leverage their positions in desperate attempt to reach BE and be free. This is the psychological disadvantage the inexperienced traders have. The next little wrong move against them is enough to cause a margin call due to over-leveraged positions. This may not apply to you and certainly not to me but every time I read an article like this one I think about how an inexperienced trader interpret what they read and how will this impact their trading approach. Unfortunately there is so much garbage on internet with hundreds of contradicting suggestions on how to do this and how to do that. It’s almost impossible for newbies to know what’s wrong and what’s right.
And the fact that the few experienced guys in this forum get so much opposition every time they try to help, makes everything a lot worse for the newbies.
I just say good luck to everyone. I try my best to help, but it’s not easy.
Start with 1000$. Increase by 3% every day. After one year 2 213 314$
@ NotAtrader: could you give me the volatility numbers for the pairs I mentioned for my education???.....glad you do your best to help......
Quoting yonnie
@ NotAtrader: could you give me the volatility numbers for the pairs I mentioned for my education???.....glad you do your best to help......
Hi. Why do you want the same numbers from me? You have the numbers. You are doing fine. Just don’t convert those numbers to percentage because you have nothing to relate this percentage value to. Use the numbers as they are (as pips).
Look at GBPAUD and AUDUSD as an example. 100 pips ATR for GBPAUD could be just an average performance while 100 pips ATR for AUDUSD is quite big volatility. Hope that makes sense. Anyway I am not trying to teach you. You should be able to find your own way to sort things out. I personally don’t use ATR as it is lagging and it has very slow transition from indicating a dead market to beginning to show signs of volatility and back. I use my own made indicator which marks resistance and support levels of number of bars (period) of your choice. If you like daily charts 25 periods then it shows you the resistance and the support levels of this period. However you can use the distance (it’s what I do) between those level as threshold value which can allow or disallow trading. The output value of this approach is being updated much quicker than what ATR does and it works for me much better for this purpose. Just an idea...
Start with 1000$. Increase by 3% every day. After one year 2 213 314$
AUD/GBP? No GBP/JPY on list? Makes me wonder if this guy has actually traded FX...
Quoting yonnie
@ NotAtrader: could you give me the volatility numbers for the pairs I mentioned for my education???.....glad you do your best to help......
Because calculating volatility is technical, it is best for you or anyone to google/bing "volatility formula". You will have Excel.

It is a step by step thing. It is not complicated, but it may take some time for you to grasp exactly what is going on. This is the process by which anyone learns technical stuff - not off a forum. Ever.

Providing you with numbers will achieve nothing. Less than nothing.
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  • Posted: Apr 26, 2021 7:04pm
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     Newsstand
    Category: Educational News
    Comments: 14  /  Views: 4,025