Deviations and Deviation Levels
Deviation levels and the "why" of it all
Option Greeks vs. Nadex Greeks
Elite Room terms & acronyms
Darrell, I still donāt understand deviations. What exactly is a deviation? What does the +5 or -5 etc. mean to trading? Is there an easy to understand answer for a newbie? In one of your webinars you talked about one of your traders who uses the deviations to trade 2 or 3 solid trades per day. I would love to understand the deviations and how to apply them to a trade. Thank you.
They are statistical levels based on implied volatility.
Implied volatility is the expected movement (premium) built into options. Its the market telling us how far its going to move. (not direction but distance) hence why they are so accurate.
The webinar is here: http://apexinvesting.net/forum/technicals-128/deviation-levels-volume-spikes-calling-day-[video]-817.html
They are accurate is the bottom line
How do you get rid of the settlement text and other text on the chart that go along with it? Thanks Jon
Right click chart - indicators - click on deviation levels - show labels false - Though not sure why you would want to do this as then you will not know what dev level you are at and you want to know this.
Hey Darrell,
Iām kind of the opposite; not trying to get rid of the text I just canāt adjust the font size any lower than 7; default is 8 I believe. Also is there anyway to extent the deviation bar more to the right so āsettlementā is to the right of the price action and not right on top of it?
I guess the only time its really on the price action is when at settlement. However, You can set the alignment to left if you want to move the titles out of the way. Turn them off. Zoom in More, Use a more transparent color (text of levels will match text of lines) You can turn off the channels (NOT recommended) or change colors or transparency of them as well.
I love the power of the diagnostic deviations. One thing I think would be helpful to see and probably would not be a lot of work to pull together is a page on the website, maybe tied into the existing deviations page that is updated everyday (), which could pull the historical 1 Dev levels going back for some period of time.
What I like to do (and have been doing manually for several weeks now) is at the start of the day, look at the 1DEV level for the instruments I am considering trading to compare with the recent past levels for those instruments to see what the market āthinksā the volatility levels will be for the day (e.g. if oil is looking very flat for the day, maybe not a great day to placing a bunch of APEX MVP Elite trades - not that implied volatility levels are always perfect predictors, but the odds will be against you if you pursue a high-volatility strategy on what is predicted to be a low-volatility day). So, if we are looking at a slow news Friday, I can look back at similar Fridayās deviation levels and try to draw out some expectation for the type of trading day weāre looking at. Looking a relative levels of implied volatility compared to the recent past.
I guess that brings up the question, do you think that is a valid/worthwhile exercise? If so, maybe having those historical levels in a coherent layout (i.e. looking at the charts zoomed way out is very hard to make any kind of judgement) would be of value. Maybe a calendar layout (like the Nadex futures expiration calendar) that you could select the instruments you wanted displayed would be good? Thanks!
The deviations are already plotted historically on the charts with the deviation level indicator. Which allows you to viusllay see increaes amd decreases in a deviation level. That page only list a handful of instruments between implied and average deviations we cover over 20,000 instruments now.
It auto plots them on the charts versus manually drawing them.
Also the deviation indicator shows you one deviation for each day as well as the low to high deviation moves which is often more important than simply the plus and minus 1 dev levels and it provides alerts when deviation levels are hit.
Basically the deviatiin page in the scanner that your using is a preview. Your doing a lot of unnecessary work recording them and plotting them and arenāt able to easily keep up with high to low dev levels nor have alerts on multiple markets by using the preview page. It appears hour an elite member so you already have the tool.
Iāve tried using the method described and as you stated levels can change and they can be missed or exceeded a much better predictor of a flat day that will not trend much is actual versus expected volume.
Tip: to zoom out just look at time based bars on a 240 minute time frame.
You must have a active membership to us the diagnostic bars (essentials or elite)
However if you now restart nt7 as of today with the newest toolkit installed you will get access to the deviation levels free on nt7 
[quote=kiskorass]when i go to put the indicator on the chart, it says disabled next to the deviation level indicators and also a box comes up that says āapex diagnostic deviation (disabled) failed to validate feature deviations if you have just started ninja trader you may be able to clear this error by pressing f5ā What do i do[/quote]
I wonder if anyone has been successful with deviation levels alone. I think one person mentioned it in the pastā¦
I will look around and try to find the links.
I studied the chart like 4 days ago and noticed when price touches at least the 0.7 deviation level and the next bar breaks that bars high or low the next bar on an hourly chart would usually continue in the same direction for the next hour. It doesnāt happen often enough to where you would be by your computer to catch it a lot of times and another problem is i didnāt go to far back on the chart.
Do you think this would just be a thing that would work until it doesnāt?
Go to the main member area - click on deviations there are a couple tutorials there - also search the forum i have covered it on the show. Also there are binary strategies on them as well that can be used. We will have a new article up soon on that application.
Is there any specific training or webinars on the Deviation (with Crossovers) indicator? I have been studying Steve Bās system and would like to apply the crossovers to other markets.
Iāve heard you say 95% for 2 deviation and 68% for 1 deviation, but what about a .7 deviation and .5 deviation?
That is a unique system he came up with all on his own. We left the indicator working that way at his request. He will share his chart and post trades in the room on occasion. Beyond his post there is no training on the crossovers.
http://apexinvesting.net/deviation-levels/
.5 Ļ = 34% chance it will not break out or touch this level (66% chance it will breakout/touch this level) .7 Ļ = 47.6% chane it will not break out or touch this level (52.4 % chance it will breakout touch this level) 1 Ļ = 68% it will not break out or touch this level (32% it will breakout/touch this level) 2 Ļ = 95% it will not break out or touch this level (5% it will breakout/touch this level) 3 Ļ =99.7% it will not break out or touch of this level (0.3% it will breakout/touch this level)
Note Deviation high to low also uses these stats
I only used to trade deviation levels and only one trade a day. Eventually made enough money to start risking on shorter time frame entries or trade multiple markets in one day. Deviations even to this day (several years later) are among my favorite indicators. 