27 June 2017
Monthly Notification, Saxo Bank
For FX crosses in particular, the major financial centres of the world all have their unique impact on the trading range. It is vital that both Fundamental...
For FX crosses in particular, the major financial centres of the world all have their unique impact on the trading range. It is vital that both Fundamental and Technical traders understand these ranges and account for them in their trading strategies.
Expected Trading Range is an analysis of the volatility of the instrument, offering a view of the expected price range movement for the specific weekday and time of day based on average instrument price ranges over the past 6 months. The daily movement is a measurement of the high to low range, calculated over 6 months with the average movement for that day marked within the range for current market conditions.
Knowing when an instrument is likely to be volatile or might consolidate due to lack of participation can give you and your clients an important insight into the psychology and flow of the market. Expected volatility can be particularly useful for:
- setting appropriate market exit levels - Stop loss and Take profit placement should not only be place at strategic technical levels but should also take account of expected trade ranges for the period that the position is expected to be held
- when to avoid trading instruments at specific times of the day when the instrument’s price is expected to be volatile
Expected Trading Ranges are integrated into Trade Signals in TraderGO and can be shown by checking the Show Expected Trading Range checkbox on a Trade Signal.
Expected Trading Ranges are shown for the Trade Signal period and for higher periods. This 15 minute Trade Signal example shows the Expected Trading Ranges for the next 15m, 30m, 1h and 4h.