What works during falling volatility? | Forex Factory

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What works during falling volatility?

  • #1
  • First Post: Mar 19, 2020 10:51am Mar 19, 2020 10:51am
Canvasing opinions here. I've seen Mean Reversion strategies work for some time, and then more recently Trend Following has worked well since the spiking Volatility. What works during the period when volatility starts to fall?
  • #2
  • Mar 19, 2020 2:52pm Mar 19, 2020 2:52pm
Quoting pipmunk
Canvasing opinions here. I've seen Mean Reversion strategies work for some time, and then more recently Trend Following has worked well since the spiking Volatility. What works during the period when volatility starts to fall?

nothing works, mean reversion never worked, from what I know!

remember, it's a zero sum game and trend following is so popular..

who is going to take the other side of your trade ? trust me, you'll get slipped all the time.

I have the naysayer virus, sorry.
  • #3
  • Mar 20, 2020 12:50am Mar 20, 2020 12:50am
Quoting pipmunk
Canvasing opinions here. I've seen Mean Reversion strategies work for some time, and then more recently Trend Following has worked well since the spiking Volatility. What works during the period when volatility starts to fall?
We can all agree that trading is primarily based on bias which is why people tend to hold true to long term trading instead of long term. What works best when volatility begins to fall is understanding that the volatility will be easier to see when focusing on the 1m or even tick chart time frames. Being as most long term investors hold on to losing positions. Instead of cutting their lost and finding out what price action can give you in the short term is key.
Threesome Daddy
  • #4
  • Last Post: Mar 20, 2020 2:54am Mar 20, 2020 2:54am
Quoting dkrock
{quote} I have to pay spreads, so I respectfully disagree. If you go to lower time frames, such as 1M and tick, when the market isn't moving in a profitable pattern, and so you cannot beat the spread, then you are wasting your time, and if you attempt to trade, then you are also wasting your money. You have to move UP in low volatility, not down. Geez. Low volatility gives you two issues. 1) The range per trade is not enough to beat the spread on lower time frames. 2) Because of the low volatility, the whipsaw and head fakes increase, forcing you...
Thank you for your explaination. One thing I believe most trades can't realize is the moment the market has lost volatility. A person who has traded during this weeks trading session has experienced when the market can go into high gear and most times when it is in between a very small range.
Look at the picture below and tell me what type of trend do you see. The timeframe shouldn't matter as the candles themselves tell you when the market has lost its juice.
I am not sure how many pip spread you are working with, but many of us are dealing with under 1 pip spreads which doesn't even worry a HFT on the 1m
Threesome Daddy
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