How do we measure stability of price changes? | Forex Factory

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How do we measure stability of price changes?

  • #1
  • First Post: Aug 12, 2022 4:07pm Aug 12, 2022 4:07pm
Hello all,

I have a small question to ask.
I am trying to formulate a strategy, and I am half way there.

To be very brief, I would like to open a buy position when price has decreased by more than X%. The issue that I am having is related to price movement. I am looking for stability during the decreased in price. How do we measure stability during the decrease; I want price to decrease gradually. I do not want price to increase and then drop massively and trigger the "Decrease in Price".

Any ideas on how to measure price's stability?
Your help is highly appreciated.

Regards
  • #2
  • Aug 12, 2022 4:24pm Aug 12, 2022 4:24pm
Quoting ramimoujaes
Hello all, I have a small question to ask. I am trying to formulate a strategy, and I am half way there. To be very brief, I would like to open a buy position when price has decreased by more than X%. The issue that I am having is related to price movement. I am looking for stability during the decreased in price. How do we measure stability during the decrease; I want price to decrease gradually. I do not want price to increase and then drop massively and trigger the "Decrease in Price". Any ideas on how to measure price's stability? Your help...
Hi Ramimoujaes

Stability of price normally occurs during periods of volume expansion. The increasing volume helps to buffer low liquidity spikes making a trend way more constant - therefore creating smooth movements with narrow pullbacks. The problem now is either the Bids or asks will become extinct within a short time causing a large spike in the direction of trend before collapsing. This collasping of price is probably the real trade you are looking for as its the best trade on the Markets.

Bottom line, you need volume data off Future's markets but thats the easy part. The tough part is about 1000 hours of your time to make sense of this information, if you get there - YOU WILL UNDERSTAND.

This is my life actually, reading data streams all night long till my eyes are red and my head throbs in pain (a Bailey's and milk helps).

Now if you are only trading Forex and looking for a indy to do this - you better hope you have lady luck riding your back.

Cheers
Trading thin liquidity at the boundary of the charts
  • #3
  • Last Post: Aug 13, 2022 1:44am Aug 13, 2022 1:44am
Quoting RickM
{quote} Hi Ramimoujaes Stability of price normally occurs during periods of volume expansion. The increasing volume helps to buffer low liquidity spikes making a trend way more constant - therefore creating smooth movements with narrow pullbacks. The problem now is either the Bids or asks will become extinct within a short time causing a large spike in the direction of trend before collapsing. This collasping of price is probably the real trade you are looking for as its the best trade on the Markets. Bottom line, you need volume data off Future's...
Hello,

Thank you so much for your reply, it is very insightful.
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