Question on Deviation levels

#1

Question on Deviation levels.

  1. Deviation levels are posted at 23:00 based on what I see on the chart.

  2. When the deviation levels are posted the price sits at the settlement level. Is this always true?

  3. If the settlement level is the most important level based on what I learned on the training video and the price is suppose to bounce from settlement level. The question is: a. Does the price bounce off of the new settlement level when the new levels come out? b. or does the price bounce after it goes up or down and THEN bounce off of the settlement level when it comes back? c. or Both A & B?

I hope to hear from someone thanks!

#2

Hey!. Hope I can answer some of these questions

  1. The Deviation levels are posted to the charts at 8:30pm (20:30) EST (for the Indices, Forex is closer to 5pm EST)

  2. False. Using the NQ (Nasdaq) for example. The Deviation levels are based on the previous days closing price. On November 9th, NQ closed at 4820.50. However when the deviation levels were posted at 8:30, it was trading around 4824.

  3. C would probably be the best answer. Its not just the settlement though. The levels are basically used as a heads up… Hey the market might be slowing down or reversing!. And then you would check one of the other indicators to see if you wanted to stay in/exit the trade.

Here is a 10 minute chart for the NQ. You can see that starting about 9:50, the market began to nosedive. Blowing through everything, all the way past the -2 deviation level. Then from 11 to now (around 12:45) The market is bouncing back and forth between the -1.5 and -2 levels

#3

Excellent answer. Thank you!

#4

You are welcome!

To correct myself again… apparently its only some of the Forex pairs that are available before 8:30pm EST.

So it would probably just be better to assume everything becomes available at that time.