Hello everyone,
Just curious about something. If we use deviations as a level of expected market movement in a day, would it be wise to pick Nadex strikes the day before based on them? For example, if we know a one deviation level is usually the most market movement we’ll see on eur/usd on any given day, would it be wise to pick an itm strike at or around that deviation level on a daily contract?
jtpyfrom, In theory it sounds like that would work. In reality it does not.
Daily 1 Deviation moves are different or each individual instrument. They change daily according to past history.and many other influences. News is always the Big mover OR Not-depends on volume. . Although 1 Deviation moves influence range of daily movement, they are still only about 68% accurate. The numbers for touching or breakthrough this 1 deviation level is still 32% of the time. In my opinion, the deciding factor (and mover) is Volume.
When you combine volume with expected ranges and deviation levels…you have the start of a new system for trading.
Last point, if I may, check out Iron Condors (Spreads) or Iron Butterflies (Binaries) and there setup if you are interested in a Daily trade. You have better odds of winning. Craig
Thanks craigmac for the reply. Makes sense what you’re saying. It was just a theory and you cleared that up.
The indices don’t reach the .7 or -.7 deviation very often. I have a feeling the percentages on indices are more in our favor from the forex pairs.
