[omrangassan]

Volatility Analysis : The Truth of Secret !!

Hello ..


I have trade FX for some years .. I have come to be convinced that the market is something Relative : Now to Past ..


I have always thought that S/R zones are the key here .. the problem comes when we really don't have a framework that let us to see the BIG Picture of the market.


I also get convinced that the Shifts in Supply/Demand are what drives the markets .. It is How we interupt these data regardless How !!!


Sometimes we really don't know whether the market will move UP or DOWN at some key level : It may break it or bounce from it ..
I beleived that Wave Analysis may have the Right FRAMEWORK at which we can see the Market/ Chart Structure .. I have to beleive that Volume/Volatility interact combinely to frame those Repetitive Waves ..


I then come to beleive that Waves are something Subjective !!!

Here Where I start to care about Volume/Volatility ..

Volatility Analysis is the thing that really MAY have my lost Framework beside Waves ..


I come here to make it Right .. Thats me : I want to make it RIGHT ..


Here is my questions that may light my eyes :

1- What is the diffrence between WRBs Analysis and Volatility Analysis ? or , let me say : What is the RELATIONSHIP ?

2- Can VA or WRB help us to define :
Reversals ?
Congestion Zones ?
Breakouts BEFORE they happened : I mean as Price still Rangebound ?
Real Trend of the Market ?

3- Can WRB or VA really make my Mind Automatically able to READ the PRICE ACTION only ?

4- How can we Interupt Shifts in Supply/Demand using WRB / VA Analysis ?


Those are What comes to my Mind here ..

Those are what really makes our Mind more Powerfull ...



Wish to hear from you ALL ..

[OAC]

Well, May be you should try to look at Market Profile as a structure where both WRB and increasing volatility can be explained as market's attempt to move away from Value Area caused by initiative buying and selling ?
Market Profile will also provide some answers to your other three questions.

[omrangassan]

Huh ..

Isn't thier anyone who cares ?!!

Strange ..

[BlowFish]

Could always look at Narrow Range bars (NR) which after all are a contraction of volatility. We all know what usually follows!

I think getting a handle on price action in general is perhaps the most valuable lesson a trader can learn.

[waveslider]

I have observed volatility to be one of the more predictable cycles in the market. How are you quantifying it?

[OAC]

One popular way is using Historical Volatility, which is a measure of price fluctuation over time. Historical volatility uses historical price data to empirically measure the volatility of a market or instrument in the past. The value rendered by a historical volatility study is the standard deviation of bar-to-bar price differences.
The other popular method is based on Tony Crabel’s classic study of range expansion, DayTrading with Short Term Price Patterns and Opening Range Breakout, predicts volatility through patterns of wide and narrow price bars.

[OAC]

Without getting into any rocket science, for practical trading purposes, the Keltner channel is a good tool. I believe Walterw uses it to identify higher volatility leading into trend condition in one of his thread. I use it for both trend or counter-trend(reversion to the mean) conditions.

[dupaski]

Larry Connors talked about using historical volatility in his book "Advanced Trading Strageties". He would look for stocks where the 6 and 10 day HV had crossed below the 100 day HV and put them on a watch list. I've looked at this over the years and it's a pretty good way to find issues that are consolidating and have the potiential to move in the short term.

-Derek