Welcome! Dear Traders,you are reading my forex trading experiences. Forex trading is a very profitable and very risky business opportunity. If you are a beginner, calm down,have a cup of coffee, and convince yourself that you need to study hard to win in forex trading. Obviously, the task is not easy as the statistics claim that only 5% traders win in forex trading. If you are determined, serious,and hard working, you can surely be included in the group of winners.

HOW TO TRADE WITH CHAIKIN'S VOLATILITY TECHNICAL INDICATOR

Chaikin's Volatility indicator works as other volatility indicators do. It moves like an oscillator, but does not indicates over sold  and over bought situations rather indicates the increase and decrease in volatility. Volatility indicators are widely used by traders. This post explains the way of trading with Chaikin's Volatility indicator.

While trading with the Chaikin's Volatility indicator, traders should focus on the following key points:
  • Increase in volatility can either increase or decrease the price.
  • Decrease in volatility can either increase or decrease the price.
  • When price increases with the increase in volatility, it is usual, and the decrease of volatility can introduce a bearish trend.
  • When price increases with the decrease of volatility, that means the trend reaches to a top.
  • When price decreases with the increase in volatility, it is usual, and the decrease of volatility can introduce a bullish trend.
  • When price decreases with the increase of volatility, that means the trend reaches to a bottom.
  • Increase in volatility during a pattern breakout signals the reliability of the breakout.
These are the basic techniques of trading with Chakin's Volatility indicator, but my trading technique with this indicator is different. I named my trading technique with this indicator is Volatility Cycle Signal. I found this technique very effective. First question is "How a volatility cycle is completed?"
  • Volatility up - price up - volatility down - price up
  • Volatility down - price down - volatility up - price down
  • Volatility down - price up- volatility up - price up
  • Volatility up - price down - volatility down - price down
The technique is very simple. When the Chaikin's Volatility indicator completes any of the above cycles, we can assume that the trend will make a major move. Other indicators should be applied to find the confirmation of reversal and continuation.

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1 comment :

  1. I LOVE THIS IS THE BEST EXPLANATION I HAVE HAD SO FAR ABOUT CHAIKIN VOLATILITY

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