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Forex Strategy Video: Forecast Volatility to Improve Your Trading

Forex Strategy Video: Forecast Volatility to Improve Your Trading

2013-12-05 00:26:00
John Kicklighter, Chief Currency Strategist
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Talking Points:

• It is easier to forecast volatility than direction as key event risk release times are often known

• Knowing whether there is a possible activity swell ahead or not can establish our trade approach

• For some markets - like the US Dollar - volatility itself can dictate the bulk of a trade setup

Learn more about how volatility can impact your trading and benchmark when it is coming from DailyFX analysts in the DailyFX on Demand.

Volatility is often an afterthought in the trade process following a combination of technical considerations or scenario analysis in fundamentals. But projecting activity levels is far a far easier and high probability task than the typical focus on direction. And, with volatility, we can choose the proper strategy to significantly improve our trade options. Furthermore, for some currencies, pairs and markets (like the US dollar) volatility itself can establish a complete trade. We look at this important aspect of trading a little more closely in the lead up to key event risk in the ECB rate decision and US NFPs in today's Forex Strategy Video.

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