Is there any way to tell if a momentum or a volatility is about to happen? Usually one would expect some sort of volatility at FO and LO but that's not always the case. Time triggers also may not have any momentum. The question is how to avoid these situations and not to trade.
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I place all my entry orders at or before the London Open, if those orders aren't filled during the London/NY session they get cancelled.
It's not necessarily volatility that comes with LO, it's volume. A lot of trading volume enters the market at this time, making it harder to move price. When directional moves happen during peak volume, those moves just seem to have more drive, more purpose. Whereas during the quieter times of day the price can sort of meander around due to lower volumes, hitting significant levels without any real follow-through. Therefore all of my trades are entered when price drives to significant levels during peak volume.
A good way to highlight/anticipate daily volatility shifts is to open a 1h chart of a major pair - eur/usd or gbp/usd - zoom out until you have a couple weeks price action on the chart, and apply a 10 period ATR. You'll immediately see the ATR making very regular highs and lows every 24 hours. If you want to try and predict how far price might move during the next trading session, this is a good place to start.
{quote} I place all my entry orders at or before the London Open, if those orders aren't filled during the London/NY session they get cancelled. It's not necessarily volatility that comes with LO, it's volume. A lot of trading volume enters the market at this time, making it harder to move price. When directional moves happen during peak volume, those moves just seem to have more drive, more purpose. Whereas during the quieter times of day the price can sort of meander around due to lower volumes, hitting significant levels without any real follow-through....
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yes indeed you need large volume at those peak trading times to break through range.
I also use the values of a basket ,when the market is flat and low volume the entire basket of quotes is stagnant ,when increased influx happens my dashboard lights up like a Christmas tree ,somtimes my particular pair cable is not front running and im able to gain very early entry with higher volume and momentum.these values also help determine if price is looking to break the stalling point.this happens across market ,it all works together
Good old fashioned bollinger bands are probably the best vol indicator I have ever used. You can tweak it by using the BBwidth instead or adding in the keltner channels to look for squeezes (google squeeze for specifics). I trade a lot of options and when the bands narrow I know that a larger than expected move is coming. Conversely I know that after the expansion and the bands start turning back in on each other the move is probably over for now. After all these years and all the indicators, it is the only one I still have on my charts.
Good old fashioned bollinger bands are probably the best vol indicator I have ever used. You can tweak it by using the BBwidth instead or adding in the keltner channels to look for squeezes (google squeeze for specifics). I trade a lot of options and when the bands narrow I know that a larger than expected move is coming. Conversely I know that after the expansion and the bands start turning back in on each other the move is probably over for now. After all these years and all the indicators, it is the only one I still have on my charts.
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yes, BB is very good and popular. I use BB(10), BB(100), BB(200). BB(100) on daily is my favour for option, eg 3 month option.
Simple take on the Bollinger Bands You have 3 situations( you decide the amount of situation and adapt it to your strategy(higher red line indicates higher volatility/bigger movements) A. Band(Price) is under 1 red line (low vol) B. Band (Price) is beween 1 and 2 red line (mid vol) C. Band (Price) is above 2 red line (big vol) You decide witch situation is for you comfortable {image}
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Hi Gollum,
What is the name of the indicator at lower sub window ?
Thanks in advance
