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Chapter 35, Part III. Stop-Loss Orders Based on Volatility.

Discussion in 'Complete Trading Education- Forex Military School' started by Administrator, May 10, 2012.

  1. Administrator

    Administrator Just Administrator :-)

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    Part III. Stop-Loss Orders Based on Volatility. [​IMG]

    Commander in Pips: Let’s proceed with our discussion of stop-loss placement framework and shift to a third way how it could be done:

    Volatility stop-loss placement

    Volatility stop-loss placement will be highly acceptable for day traders or reversal traders. It’s preferable if the market is trading near the high or low level of volatility. First of all I want to direct you to my volatility explanation – if you’ve forgotten it – “Chapter 20, Part 1 – Intro to breakouts and fakeouts”.

    [​IMG]

    There you can remember what volatility is and its properties. Here we just say that based on volatility we can estimate the range for any period that market could not exit with a 99% probability. In fact, you may use any probability that you want. The higher probability – the wider the range will be.
     
    #1 Administrator, May 10, 2012
    Lasted edited by : May 15, 2012

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