How to know the volatility?

Beginner Questions
1

Hello guys,

How to know if a pair will meet a lot of volatility in a pair in the future? I am working on a strategy that requires a lot of volatility in the pair.

Can someone give me examples of when pairs will see a lot of volatility?

Thanks!

Wllen1

2

I am not sure if you mean short term future or long term future but in the short term there are major news events that create high volatility such as payrolls and rate decisions. You can find out the long term volatility from any pair using it’s historical data. I attached both the pips volatility and absolute volatility of the 4 hour candlesticks on the EURUSD for the past 4 1/2 years. You can see that even though the pip volatility has goes down the absolute volatility of the pair has gone up, which is the pip movement vs. the overall price of the currency.

volatility.jpg700×670 67 KB

3

So far the best volatility indicators are:
The ATR
Chaikin’s volatility indicator
Bollinger bands…
and of course the tick volumes from major brokerages

4

Haha thanks guys,

What I mean is that even though major news like rate decisions, NFP and unemployment give us huge volatility, there are some big moves in the pairs that are not triggered by news releases at all. Also, if I take all the news released considered as “important” and look at their volatility, only few of them will create something like -/+ 60-70 pips, which I kinda need to make my strategy work.

Any idea of how to know in advance if this pair will see some surge in volatility, in the days to come, besides using some very important news releases?

Thanks!

Wllen1

5

I mean the short term volatility. Preferably within a week.

6

There is no way to know, period, get used to it.

7

[QUOTE=“wllen1;563684”] I mean the short term volatility. Preferably within a week.[/QUOTE]. You can’t predict non news volatility until it’s actually happening. Sometimes when you have converging support and resistances areas and price is getting squeezed between the two you will have a large breakout that is accompanied with high volume.

8

Nope, don’t think you really can predict the currency volatility ahead of time…