Standard Deviation - An Essential Tool For Forex Trading Success

Discussion in 'Trading' started by ASusilovic, Dec 28, 2011.

  1. 5 min Chart (1st, 2nd,3rd standard deviation):


    1h Chart (1st, 2nd,3rd standard deviation):


    4h Chart (1st, 2nd,3rd standard deviation):


    As you can see/observe EUR/USD is "usually" floating within the upper and lower 3rd standard deviation. On longer time frames, too. Based on this observation, it´s actually very easy to define a simple trading strategy.

    Add the CFTC commitment of traders reports and voila!

    Happy New Year!

  2. Maverick74


    You do know that is the whole premise of standard deviations right? To encapsulate the price data. I think the tool is rather useless.
  3. AS, the trading is tight because it's the quiet period between NY close and Aussie/Japan's open. Any movement is going to trade outside.
  4. you mean box it up and trade the break......?

    worxs 4 me.

    a great strategy.

    puke 'em out to the 5.7 exit door



  5. nitro


    Risk is defined in many ways, e.g., variance, 95th percentile, 4th moment etc, and each definition would have a different strategy.

    The one you single out is second moment risk. What you are suggesting is not wrong, just not complete.