Hi people,
Hoping you can help me with this problem I have ran into with analysing data on Meta Trader version 4, or any other platform for that matter.
I’ll try and keep this simple without going into why, or the relevance of why I need to know the following.
I decide to open a trade (buy or sell) at say 8.00am Tuesday morning. I decide to look back at the historical data from this 8.00am open price to the open price for that day, which would be 12.00pm midnight on the Monday. I use 5 min candle sticks, and I can see the amount of range between the extreme high and extreme low which has been reached between 12pm and 8am.
Of course on some days the range will be much greater, and on other days the range will be much less.
I want to use this data as a benchmark, I want to look at this as a measure of short term past volatility. Once I have a figure or index for this daily result I can then do the same for each and every other day. This result can then play a role in determining what stop loss I should use for my 8.00am example trade.
If the past volatility result between my 12pm midnight and 8am example trade is higher than my decided ‘normal result’ then I can increase my stop loss as I would expect price swings to be greater than normal. This makes perfect sense and the same theory would be used for results when the volatility result is less than my ‘normal result’. I guess you could call this unknown ‘normal result’ the benchmark.
So,every day I want to open a new trade, instead of having to measure each and every five minute candle between 12pm midnight and 8.00am of each and every day to get a total figure, is there an existing tool that can add up total price movement between selected time ranges? Scrolling over the absolute high point to the absolute low point in a given time range is simple, but I want each and every candle to be included, even if they cancel each other out. E.g. a 5pt increase candle next to a 5pt decrease candle would result in 0pt change, however, I would want an answer of 10pt’s movement.
I hope the above makes sense, it would be far easier to explain by the use of pictures, but hay, ive tried.
Many thanks.