Traders love volatility – usually the more the merrier. But the recent volatility in the USDCAD has been historically high.

That kind of volatility is usually only found in a market crisis. But this one has been all about crude oil.

Look at the following chart of The USDCAD pair for the past 6 trading days.

USDCAD - 1262016- 6000 Ticks per Bars

The level of volatility is really great – more than we usually see in several times the amount of time.

 There was almost 6 and a half cents movement between the high and the low for the period! And there were more than three oscillations of more than two cents each.

If yo are going to trade that kind of volatility, you need indicators that you can really rely on – being on the wrong side of such a market can be very costly.

My RMI is such an indicator. It consists of two oscillators: a YELLOW line and a CYAN line.

Interpretation is generally:

Both lines above price bars and rising – generally bullish
Both lines below price bars and falling – generally bearish.

CYAN line above the YELLOW line is bullish.
YELLOW line above the CYAN line is bearish.

Directional and positional reversals – change in price direction likely.

There is much more to the RMI as well.

I use it to plot those horizontal lines – a week in advance.

You can get the RMI at the TradeStation App store: RMI

 

One Response to FOREX Volatiltiy

  1. Thank you for this information. It is indeed very helpful

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