Methods for reducing the volatility of forex? | Forex Factory

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Methods for reducing the volatility of forex?

  • #1
  • First Post: Mar 15, 2016 9:54pm Mar 15, 2016 9:54pm
Aside from moving to a higher timeframe, has anyone had success with reducing the volatility by moving to odd timeframes(2 hrs, 25 min, 3.5 hours) or to new chart types?
  • #2
  • Mar 15, 2016 10:27pm Mar 15, 2016 10:27pm
Get rid of all charts.

Sit & watch the daily %-change of all major USD pairs.

Then you will see for the first time that the real fx volatility isn't high at all!
  • #3
  • Mar 15, 2016 10:54pm Mar 15, 2016 10:54pm
hallo Flipper, what do you mean? May you explore further? Thanks.


Quoting The-Flipper
Get rid of all charts. Sit & watch the daily %-change of all major USD pairs. Then you will see for the first time that the real fx volatility isn't high at all!
  • #4
  • Mar 15, 2016 11:36pm Mar 15, 2016 11:36pm
Quoting The-Flipper
Get rid of all charts. Sit & watch the daily %-change of all major USD pairs. Then you will see for the first time that the real fx volatility isn't high at all!
yeah, like I mentioned, moving to the daily tf is no-brainer. I was just wondering if there were any lesser-known methods.
  • #5
  • Mar 16, 2016 12:17am Mar 16, 2016 12:17am
Quoting aicccia
Aside from moving to a higher timeframe, has anyone had success with reducing the volatility by moving to odd timeframes(2 hrs, 25 min, 3.5 hours) or to new chart types?
New chart types: you might find this thread interesting. I know a couple of traders who use a proprietary system based around range bars, and it's among the most successful indicator-based approaches that I've seen. One of these gents manages an account for me, and hasn't had a single losing month in the 16 months that I've been with him. I'm afraid I can't give any more details outside of the commercial forum. But if their results represent convincing evidence, then range bars might well be worth a look.
  • #6
  • Mar 16, 2016 1:18am Mar 16, 2016 1:18am
Hi Aicccia,

Volatility in itself is neither good nor bad. It just IS. And if we can confront it as one of the truths of the market, we don't need to avoid it or try to reduce it. The closer we are to the truth of a situation, the better we can confront and handle it.
  • #7
  • Mar 16, 2016 3:24am Mar 16, 2016 3:24am
Quoting aicccia
Aside from moving to a higher timeframe, has anyone had success with reducing the volatility by moving to odd timeframes(2 hrs, 25 min, 3.5 hours) or to new chart types?
Not clear for me why do you need to reduce volatility? And how could you implement it? Probably you just need to choose some not volatility instruments...
  • #8
  • Mar 16, 2016 4:44am Mar 16, 2016 4:44am
I don't know what volatility means to you. For lots of traders volatility means "big moves in the market" (=trend). For me it is more the academics definition "the standard deviation of the returns" = high ATR(.) usually without any significant move. Quick the opposite in fact. If the second definition is yours then you might be interested in using constant range bar charts (CRB). The volatility can't be reduced per se but it is made constant with range bar charts. Yet I wouldn't recommend the thread pointed by Hanover as it is a martingale based strategy (the lowest size in the explorer is 1 micro and the biggest is 50 full lots!)

Here is a plot of volatility in CRB vs time based TF: http://www.forexfactory.com/showthre...81#post7432181

HTH

Note that AFAIK MT4 can't handle CRB correctly it interpolates the 1min TF
No greed. No fear. Just maths.
  • #9
  • Mar 16, 2016 5:39am Mar 16, 2016 5:39am
Quote
Aside from moving to a higher timeframe, has anyone had success with reducing the volatility by moving to odd timeframes(2 hrs, 25 min, 3.5 hours) or to new chart types?
I think you are trying to say how to reduce the sound of the market. Am I right?
Old ways dont open new doors
  • #10
  • Mar 16, 2016 6:02am Mar 16, 2016 6:02am
Without volatility there is no money? Volatitlity = Volume (People are trading and there is money to be made)

Volatility is our bread and butter.
  • #11
  • Last Post: Mar 16, 2016 6:11am Mar 16, 2016 6:11am
Do you want to reduce the volatility of your own accounts PnL?

A trader can not reduce the volatility of the FX Market - the market just is. I may have misunderstood what your question.. volatility will be reduced if people/banks/institutions stop trading or reduce their trading activity. So the only way to reduce volatility is to influence all these market participants to reduce their trading volume, like today for example. Markets like GBP/USD are moving 15-20pips in one hour where a normal hours move maybe double that at this time of day. This is because of fed interest decision later this evening.

I have a feeling that the question you want answered is how I reduce the swing in my account balance when trading Forex? Good money management and a consistent approach

Best of luck
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