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Forex Market Historic Volatility

Category: Forex Technical Analysis

Forex Market Historic Volatility

Forex Historic Volatility Research of FxPros.net

This research is based on data and analysis of the most popular pairs in the Forex market. The data used are corresponding to a wide time frame beginning in the first day of the millennium (1/1/2000) and ending in August 2013. The total time frame covers about 13.5 years.

■ Daily Statistics → Time Frame Between January 2000 and August 2013.

Measuring Historic Forex Volatility

For Measuring Forex Volatility we are using two methods that are based on Average True Range (ATR).

What is the Average True Range (ATR)?

The Average True Range (ATR) is an indicator developed by J. Welles Wilder to measure market volatility. {Book, “New Concepts in Technical Trading Systems”, 1978}

The True Range according to Wilder can be measured using two main methods:

■ 1-Method: Current High minus the Current Low

■ 2-Method: Current High minus the Previous Close

Our Variation Model to Measure Volatility

In order to measure volatility we are using two methods similar to ATR:

1) Intraday Volatility

■ Intraday Volatility (%) = {(Intraday High – Intraday Low) / Intraday Low}%

2) Daily Volatility

■ Daily Volatility (%) = {(Current Daily High – Previous Daily Low) / Previous Daily Low}%

MACD & Forex Technical Analysis

Category: Forex Technical Analysis

Using MACD When Trading Forex

Introduction to MACD (Moving Average Convergence / Divergence)

MACD is a very popular technical analysis tool developed back in 1979. MACD aims to identify major trend reversals in the prices of Financial Traded Instruments, and it can do that job relatively well. But when it comes to the identification of overbought and oversold market levels there are much better tools available than MACD to do that job.

In overall, MACD is a good trend-indicator that it should be used along with another indicator capable of identifying overbought and oversold market levels, such is RSI. Of course more advanced traders may use their own developed systems to identify overbought and oversold market levels, I use TCI (Trading Center Indicator), more about TCI Technical Analysis here.

Attachments:
File	Description	File size	Created
MACD on MetaTrader4	MACD ON MQL-4 (MetaTrader4)	2 kB	2013-08-05 11:52

Forex Technical Analysis

Category: Forex Technical Analysis

Technical Analysis Tools –Full Overlay and Indicator List

Technical Analysis is a set of tools and techniques used either to identify the market trend and/or either to identify if the market is trading in overbought or oversold levels. Here are the basic categories and tools of technical analysis used by traders worldwide.

■ Overlays

■ Price-based indicators

■ Volume-based indicators

■ Market and Breadth Indicators

Hundreds of different indicators are available today. Most traders nowadays use technical analysis inside MetaTrader4. Other trading platforms offer a wide variety of indicators as well, for example, the NinjaTrader platform, which includes additionally astonishing charting capabilities. Even Ms. Excel can be used as the basic framework for implementing Technical analysis.