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Peter,
Periods of low volatility often precede significant directional moves. Several well known traders track volatility looking for it to drop below a certain percentage of the 100 day mean volatility. When this situation occurs they then look to buy/sell a breakout of the daily range. This and a number of variations on this theme do seem to provide good entry setups.
Good Trading,
Bill
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From: Peter Lim
Sent: Sunday, November 23, 1997 3:22 PM
To: RealTraders Discussion Group
Subject: GEN:Probability Box
Hi,
As a measure of volatility, there is an indicator called Probability Box in
the software Market Analyst ( http://www.vtc.com.au/ma/ma.htm) which will
show the volume Std Deviation, Volume mean, the range std. deviation and
the range mean.
Could someone throw some thoughts on how one can use this Probability Box
data to assist in trading?
Thanks.
Regards
Peter
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