The Quantum volatility indicator captured dramatic price action in the yen pairs during this month's BOJ meeting. This confirms what had already been signalled in the currency options market. The overnight implied volatility, which is the metric we watch, was at 50% (a six-year high). So a violent price reaction was expected, of which the aud/jpy was one example. As shown on the hourly chart above in the MT4 profile for the pair, we see the relentless move higher and the volatility trigger on the huge up candle. This trigger of the purple arrows happens in real time and warns us that the price action is outside the average true range for this time frame.
Trader reaction is usually FOMO, with many jumping in just as the price is likely to pause or reverse, as in this case. This is a classic trader's trap. It happens all the time. However, when we read the price action alongside volume, we can spot...
Discover how to trade volatility by looking to the cross currency pairs
Discover how to trade volatility by looking at the cross-currency pairs, and this morning in the London session, this was a good example. Many forex traders would have been focused on GBP/USD as the news was released, leading to a whipsaw in price action. However, moving to the GBP/AUD delivered some real trading opportunities with lower risk.
https://youtu.be/bv6Y5Sylt7A
00:01
Webinar introduction and disclaimer
00:01
The webinar begins with a warm welcome from the host and her husband David. She reminds viewers of the trading disclaimer, emphasizing the risks involved and advising against using money they cannot afford to lose. She also introduces the session for first-time attendees.
00:29
Overview of volume price analysis method
00:29
This session focuses on analyzing the U.S. markets, particularly the indices. David will present charts related to oil, gold, silver, and other commodities and indices, while the speaker will cover forex charts. The analysis is based on price action combined with volume, following...
Don't get trapped with FOMO - use the volatility indicator
The volatility indicator is such a powerful tool and one which will help to keep you from jumping in too early and joining other traders on the fear of missing out, or FOMO. This is a powerful emotion and one which trap many traders, but with the volatility indicator, you can avoid such traps.
https://youtu.be/Gv7jIug4Vds
00:14
Market congestion and holiday impact
00:14
The speaker reviews multiple currency strength indicators, including the VIX and others, observing that the market currently lacks clear direction as many participants seem to be on holiday. The yen is fluctuating without a strong trend across various short timeframes. Similarly, the Australian dollar shows some buying interest but no decisive trend against the yen. The currency strength indicator reveals congestion and flatlining, indicating a lack of momentum and trend strength in the market at this time.
01:08
VIX indicating low market risk sentiment
01:08
The speaker discusses the stability of certain currency payers, indicating they are unlikely...
