Diagnostic Deviation Levels & Percentages

#1

What are the chances in terms of percentages(like 10 or 20 percent for example) that each APEX Diagnostic Deviation Level will be broken on an average trading day?(All the APEX Diagnostic Deviation Levels listed on this website are “-3 -2 -1.5 -1 -0.7 -0.5 Settlement 0.5 0.7 1 1.5 2 3” I believe). In your opinion which deviation level is the best to use as a support or resistance level when trading on a daily basis? Why are the deviations levels are not posted on the GBP/JPY and the EUR/JPY? Is there anyway that the deviation levels could be used on other assets outside those which are traded on Nadex?

Elite Room terms & acronyms
#2

[FONT=Helvetica]Check under deviation levels - basic info for more details on the levels[/font]

[FONT=Helvetica][FONT=Arial]How Do i use each of the levels?[/font][/font]

[FONT=Helvetica][FONT=Arial].5 σ[/font][/font]

    • .5 σ = 34% chance it will not break out or touch this level (66% chance it will breakout/touch this level)
    • [Note this is a probability of touching not expiring at that level.]
    • When directional look to tighten stops when you are directional and the price exceeds the .5 σ
    • Note low volatility days (i.e. no news) – .5 σ is more like a 1 σ on % chance of breakout]
    • Volume is key…if it is not breaking through this area with volume or approaching it with lower volume there is a higher probability of a reversal. If it breaks through it with volume there is a higher probability it will continue higher.

.7 σ

    • Look to tighten stops again at .7 σ. (Very important!)
    • This level is less about probability and more about tightening stops, taking profits, and looking for potential reversals
    • You may want to consider taking partial profits at this level.
    • Volume is key…if it is not breaking through this area with volume or approaching it with lower volume there is a higher probability of a reversal. If it breaks through it with volume there is a higher probability it will continue higher.

[FONT=Arial]1 σ[/font]

    • 68% it will not break out or touch this level (32% it will breakout/touch this level)
    • [Note this is a probability of touching not expiring at that level]
    • Unless you are seeing a significant breakout in volume then you may want to take some/all profits at this level
    • From this point forward you will want to tighten stops if it continues to rise/fall
    • Volume is key…if it is not breaking through this area with volume or approaching it with lower volume there is a higher probability of a reversal. If it breaks through it with volume there is a higher probability it will continue higher.

[FONT=Arial]1.5 σ[/font]

    • This level is to provide a profit target/reversal target when the market does break through the 1 deviation with some volume through the 1σ level as it often will not move far enough to hit the 2 σ level.
    • There is no need to chart this level unless the underlying hits the 1σ level

[FONT=Arial]2 σ[/font]

    • 95% it will not break out or touch this level (5% it will breakout/touch this level)
    • [Note this is a probability of touching not expiring at that level]
    • Unless you are seeing a significant breakout in volume then you may want to take some/all profits at this level
    • If you stay in from this point forward you will want to tighten stops if it continues to rise/fall
    • Volume is key…if it is not breaking through this area with volume or approaching it with lower volume there is a higher probability of a reversal. If it breaks through it with volume there is a higher probability it will continue higher.
    • Rarely will you chart this level

[FONT=Arial]3 σ[/font]

    • 99.7% it will not break out or touch of this level (0.3% it will breakout/touch this level)
    • [Note this is a probability of touching not expiring at that level]
    • It is extremely rare (October 2008 rare) for these levels ever to be hit through there are instances – if they are hit the chance of them passing this level is basically .3% – taking profits and looking for reversals is usually key at these levels.
    • Very rarely will you chart this level
    • This number is not exactly 3x 1 deviation.
#3

GBP/JPY and EUR/JPY not posted due to they are based on implied volatility out of options which GBP/JPY and EUR/JPY are not exchange traded for market wide calls/puts. However, I have resolved a formula for this and they will be available in the future 90 days or so.

#4

If something is not posted that should be (ie fx not showing up) just post in the help desk our techs will update it.

#5

you can use them on currencies, options, (if applied to etf’s or indices you would have to manually account for the difference in pricing) - futures forex are shown as well - we will be adding a half dozen more currency pairs, 3,000 stocks/etf’s and indices, and 40 futures - hopefully in the next 90 days.

#6

1 deviation is the most solid - however i used them for trailing stops more than anything as seen in 1 of the 7 trailing stop rules in the apex elite method training and pdf under apex elite resources