101,000
For improve trading performance, we need to take into account such a factor as volatility of currency pairs. Some novice traders either ignore it or are not even familiar with this concept. So I decided today to talk about what the u currency pairs are and how it can affect trading. This is especially important for those traders who prefer to trade during the day. Volatility is the number of points that the price of a currency pair passes over a period of time. Of course, there can be no exact value. This is the average range of traffic quotes per hour, day, week, month. It is calculated on the basis of historical data. At the same time, the more candles will be taken into account when calculating volatility, the more accurate this indicator will be. is influenced by a number of factors, including trading sessions.
Volatility and trading sessions
If you observe the market during each trading session, you can see how the volatility of currency pairs changes. The most popular trading session among investors is European. This is due to the high volatility over this period of time, which allows you to earn good money. The main reason for the strong movements at the European session is the press release and high activity in Europe’s business circles. As market observations show in the European session, currency pairs USDCHF, GBPUSD and EURUSD can travel a distance of about 100 points. Volatility during the US session is also quite high due to a press release in the US. This is especially true for currency pairs that include the dollar. However, the average price range is still slightly lower compared to the European session. For example, in GBPUSD, EURUSD, and USDCAD pairs, this is 80-90 points. As for the Asian session, it is considered the most peaceful. Therefore, it is preferred by those traders who are willing to cash in on small movements. However, even at the moment there may be strong trends. This usually happens after the release of important news in Japan. In the Asian session it is worth trading pairs with the yen. Their volatility can range from 80 to 110 points.
How to exploit volatility in trading
Actually the principle is very Simple. Let’s say your trading strategy has created a signal to enter the market for a currency pair traded. At the same time, it can be seen that she has already exceeded the distance of 80 points with an average volatility of 90-100 points. In this case, it is better to refuse to open the contract. And if the pair passed only 20-30 points in the direction of the signal, you can safely enter the market. In addition, the average position variability is used for setting and stop-loss. As you can see, euch of currency pairs is a useful tool and must be used in trading. Inga Fedorova 07.11.2020 Record volatility of currency pairs First appeared magazine for forex traders forex-for-you.ru.