What has happened to volatility | Forex Factory

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What has happened to volatility

  • #1
  • First Post: May 4, 2017 6:02am May 4, 2017 6:02am
Why don't we see strong movements even when technical price patterns are there, even when news like yesterday May's would normally shock markets, French elections with possible Frexit ahead, and still VIX near all time low? What do we need? SP500 to crash, EU disintegration, WW3 getting started to bring volatility back to the markets? Are ECB, FED, BOE and BOJ killing it with their Asset purchase programmes? Nearly all hedge funds have fled from forex market since 2012, because of low volatility. Strange times...
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  • #2
  • May 4, 2017 8:44am May 4, 2017 8:44am
I actually prefer less volatile market, it suits my style much better)) There are still lots of pips to be made almost every day and if not, you have leverage to help you out
  • #3
  • May 4, 2017 8:54am May 4, 2017 8:54am
Quoting seloq
I actually prefer less volatile market, it suits my style much better)) There are still lots of pips to be made almost every day and if not, you have leverage to help you out
It's true, opportunities are always there, but I'm a swing trader myself, hunting plus 100 pips moves. I used to get at least two to five good signals per week, now I'm getting far less. I need more volatility or I might just die of boredom. Maybe I should take a trip around the world, hoping volatility is back, when I return
  • #4
  • May 4, 2017 8:59am May 4, 2017 8:59am
You are right. Its not the best time for swing traders, if you get 40 pips a day its a great result on most days. I trade Gold mostly so I get my 100 pip days quite often and cant really complain. For me 1 set up per week is more than enough and the main thing is that there is much less stress involved. I dont have to check the charts every 30 min for 15 hours per day and then babysit my trades because trading opportunities are so rare.
Maybe just change your style until volatility returns and start doing more intra day work...
  • #5
  • May 4, 2017 9:04am May 4, 2017 9:04am
Quoting Tom81
{quote} It's true, opportunities are always there, but I'm a swing trader myself, hunting plus 100 pips moves.
Maybe watch some other pairs? I mean only GBPAUD moved +400 pips in the last 2 days for example.
"Men Who Can Both Be Right & Sit Tight Are Uncommon" ~ Jesse Livermore
  • #6
  • May 4, 2017 9:09am May 4, 2017 9:09am
I'm targeting 20-30-40 pip moves intraday. About a year ago these took somewhere between 1-3 hours to play out between my entry and exit. Now at least the triple of that, and quite often i just have to hold it over night or even more. Also it is much easier to catch a fifth of the daily move, than the half or the 3/4 of it.

Something is fundamentally wrong with the global economy, it is just not evident for us yet, only for the most professionals. High impact news come and go, and simply nothing has an effect on the market as time passes it just gets more rangey.

Hopefully the French election is the trigger, if not, no idea. US attacking NK maybe?
Price and volume reveals everything. The market moves on supply and demand.
  • #7
  • May 4, 2017 9:11am May 4, 2017 9:11am
Quoting seloq
You are right. Its not the best time for swing traders, if you get 40 pips a day its a great result on most days. I trade Gold mostly so I get my 100 pip days quite often and cant really complain. For me 1 set up per week is more than enough and the main thing is that there is much less stress involved. I dont have to check the charts every 30 min for 15 hours per day and then babysit my trades because trading opportunities are so rare. Maybe just change your style until volatility returns and start doing more intra day work...
I traded intra day for years, but I'm just sick and tired of being clued to computer screens all the time. Now I plan my trades in advance during the weekends, set my price alarms and wait until price gets where I want it to be and then start watching how it behaves around these levels. I get much better trading results this way with much less screen and more charts analyzing time over wide range of currency pairs and commodities. It is practically a stress free trading method. And I trade to work less, not more, otherwise I could just go back to some brokerage house and work all day long again. Not my cup of tea anymore
  • #8
  • May 4, 2017 9:13am May 4, 2017 9:13am
Quoting michisuperfr
{quote} Maybe watch some other pairs? I mean only GBPAUD moved +400 pips in the last 2 days for example.
I caught GBPAUD move for 230 pips, but not a lot market movers like that nowdays
  • #9
  • May 4, 2017 9:18am May 4, 2017 9:18am
market is getting slower, even London open is not exciting any more.

Many techniques that learnt over the years now cannot used for consistent trading.

Only Trump makes market dance. Apart from that, NFP, ADP, FOMC are chicken feet vs Trump.
  • #10
  • May 4, 2017 9:21am May 4, 2017 9:21am
Quoting michisuperfr
{quote} Maybe watch some other pairs? I mean only GBPAUD moved +400 pips in the last 2 days for example.
Thats not really a valid argument because GBPAUD has a different nature in terms of price ranges.
Take the daily ATR per pair and use that as comparison material:

G/A 200 +/- pips per day is the (50wk) daily average, eur/usd 80 +/- as comparison (50wk)

G/A 160 +/- pips per day is the (1wk) daily average, eur/usd 60 +/- (1wk)

Comes down to -20% of average G/A and -25% average E/U volatility. Not "that" big of a difference.

https://www.mataf.net/en/forex/tools/volatility for your reference
  • #11
  • May 4, 2017 9:25am May 4, 2017 9:25am
Well, if you guys are targeting 80 pips but only get 40, then why not just double the leverage and maximize the profits that way? Thats the reason leverage exists after all
  • #12
  • May 4, 2017 9:29am May 4, 2017 9:29am
Quoting Tom81
{quote} I caught GBPAUD move for 230 pips, but not a lot market movers like that nowdays
From my observation volatility seemed to be more usual in the summer months. Do you think something has fundamentally changed whereby volatility is systematically dying all across the board for all pairs?
  • #13
  • May 4, 2017 9:30am May 4, 2017 9:30am
Quoting zamans98
market is getting slower, even London open is not exciting any more. Many techniques that learnt over the years now cannot used for consistent trading. Only Trump makes market dance. Apart from that, NFP, ADP, FOMC are chicken feet vs Trump.
Exactly, and you can't predict Trump Tweets. They are just the thing to take you out of otherwise technically and fundamentally good trade. I've talked to Thomas Bulkowski, to my knowledge one of the best technical pattern traders out there, he statistically analyses everything that can be analyzed and he is also saying that statistics behind long term pattern reliance is not what it used to be. I don't know why, but something is probably not normal. Also hedge funds moving out of forex is showing that institutional clients don't feel the need for hedging currency risks so much anymore.
  • #14
  • May 4, 2017 9:31am May 4, 2017 9:31am
Volatility is not dead.

You can create your own Cash PnL Flow and trade it.
  • #15
  • May 4, 2017 9:37am May 4, 2017 9:37am
According to weekly volitility shown at http://www.myfxbook.com/forex-market/volatility it doesn't look that bad.....
Simplicity is the ultimate sophistication - Leonardo da Vinci
  • #16
  • May 4, 2017 9:37am May 4, 2017 9:37am
Quoting The-Flipper
Volatility is not dead. You can create your own Cash PnL Flow and trade it.
It may not be dead today but the question is whether or not it is increasingly dying.
  • #17
  • May 4, 2017 9:48am May 4, 2017 9:48am
Quoting TGS
{quote} It may not be dead today but the question is whether or not it is increasingly dying.
Absolutely not.
  • #18
  • May 4, 2017 9:49am May 4, 2017 9:49am
Quoting heispark
According to weekly volitility shown at http://www.myfxbook.com/forex-market/volatility it doesn't look that bad.....
EUR/USD 130 pips weekly volatility not bad? This used to be near daily volatility for this pairs. Similar with all majors...

According to John Kicklighter at dailyFX, "the current 8-day range for the $SPY ETF (S&P 500) is the fifth smallest in 23 years"
If this is not super low volatility, I don't know what it is.
  • #19
  • May 4, 2017 9:55am May 4, 2017 9:55am
Quoting The-Flipper
{quote} Absolutely not.
But this is contradicting what Tom81 is saying about his volatility observations. Is there some evidence other than the "absolutely not" in order to show volatility hasn't been increasingly dying in the past few years?
  • #20
  • May 4, 2017 9:57am May 4, 2017 9:57am
Just wait a minute, and he'll start going on about this actually being the most prosperous period in the markets, and he averages 300 pips every day on a 1 tick chart in 500 trades daily, and the main problem is, that we are actually much shittier traders than he is.
Price and volume reveals everything. The market moves on supply and demand.
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