Stock Portfolio Organizer

The ultimate porfolio management solution.

Shares, Margin, CFD's, Futures and Forex
EOD and Realtime
Dividends and Trust Distributions
And Much More ....
Find Out More Here

WiseTrader Toolbox

#1 Selling Amibroker Plugin featuring:

Advanced Adaptive Indicators
Advanced Pattern Exploration
Neural Networks
And Much More ....
Find Out More Here

Trading the Volatility Bands for Amibroker (AFL)

Rating:
3 / 5 (Votes 11)
Tags:

You must have come across trading strategies based on Daily pivot and variations like the camarilla pivots.

Here is a strategy to trade on the statistical levels of volatility. The volatility values for a particular day are calculated. Based on these volatility values bands are calculated for different standard deviations 0.25, 0.5, 1.0, 1.28, 1.5, 2.0, 2.5

This is based on the assumption that volatility reverts to the mean and the price also seeks a equilibrium value. As per statistics the probability of the price being contained within a certain standard deviation band is as follow.

STDDEV PROBABILITY
1.00 – 68%
1.28 – 80%
1.50 – 88%
2.00 – 95%

You will observe that the prices tend to reverse at the extremes of these bands. The probability of a price reversal at the one standard deviation band is 68% and the probability of reversal at the 1.28 bands is 80% and so on. These probability bands provide a good method for intraday traders.

One can go long when the price crosses a particular band keeping the band value itself as a stop loss. When the price crosses the next band raise the stop loss thereby locking the profit. When the price stalls at a particular band unable to cross it is time to close your position and be ready to go on the reverse trade.

This strategy based on the volatility bands provides good high probability trades.

Screenshots

You cannot view the code for the following reasons:
  • You must be a member and have contributed at least 1 indicator

15 comments

1. alexwang9999

very nice!

2. abualfoooz

very nice!

3. arm

NICE BUT TOO BUSY

4. panno

even after logging in formulas is not showing

5. relative

Thanks

6. anandnst

too good

7. chinmay

ANYBODY PLS TELL ME HOW TO GET THIS CODE, OR WHERE IS THE CODE
FORMULA IS NOT SHOWING
PLS HELP

8. Shailendra-0

I SUBMITTED 2 FORMULAS BEFORE FEW WEEKS BUT THEY NOT SEEM TO BE APPROVED YET. PLS .HELP

9. mohanjamkhekdar

GOOD WORK

10. Amirdhavarshan

Good Work

11. rv2810

dear admin

i am more than happy to thank you for releasing this afl formula.
thks a lot for helping a newbie like me.

god bless

12. 22148715

SIR PLZ GIVE ME AFL FORMULA THIS CHART

13. praveenkarthick

good work

14. smer59

لابلابلابلابلابلا

15. hellowen

good work

Leave Comment

Please login here to leave a comment.

Back