Disappearing Volatility

I used to say that volatility had no predicting power – from one day to another at least. Here’s something to point out that nobody seems to monitor for.

The high tide of the bear seems to be over with in the EUR/USD currency pair.

After the 9.5x stretch away from the mean on the upside and a 9.8x stretch to the downside,

the last maximum stretch did not exceed the 5x mark,

and to achieve that it had to get a new whip from the Market Makers, as Wave 3 fizzled out at the 4x mark.

Since volatility has been coming in, I see the odds favor a similar return for a whip, that should probably materialize at 1.0850 or so, where price would come into both Mr. Maroon and the Lower Guard Rail.

The next 2 levels down are 1.0727 & 1.0644.

#property copyright "Copyright © 2020, Macdulio" 
#property link      "https://forexfore.blog" 
#property description "V1.0"
#property description "Stretch Marker"
#property description "The dedgree of Stretch from the MEAN."
#property strict

//--- indicator settings
#property indicator_separate_window
#property indicator_buffers 1
#property indicator_color1  clrGreen
#property indicator_level1 5
#property indicator_level2 9.5
#property indicator_levelcolor clrBlue
#property indicator_levelstyle STYLE_DOT

extern double FSize=32;
double FMax = FSize*6/5;
double iHi4[];
double iLo4[];    

double ExtATRBuffer[];

int init(){
  
   SetIndexBuffer(0,ExtATRBuffer);   
   SetIndexStyle(0,DRAW_HISTOGRAM,STYLE_SOLID,4,clrGreen);
   return(0);
}

//+------------------------------------------------------------------+
//| Average True Range                                               |
//+------------------------------------------------------------------+
int start(){
  
  ArrayResize(ExtATRBuffer, Bars); 
  ArrayInitialize(ExtATRBuffer, EMPTY_VALUE);   
  ArrayResize(iHi4, Bars); 
  ArrayInitialize(iHi4, EMPTY_VALUE);   
  ArrayResize(iLo4, Bars); 
  ArrayInitialize(iLo4, EMPTY_VALUE);   
  
   int i;

  for(i=Bars-100; i>=0; i--){ 
   
     if (Period()==240)   iHi4[i]=iMA(NULL,0,52,0,MODE_EMA, PRICE_HIGH,i);
     else if (Period()==30) iHi4[i]=iMA(NULL,0,414,0,MODE_EMA, PRICE_HIGH,i);
     else if (Period()==60) iHi4[i]=iMA(NULL,0,207,0,MODE_EMA, PRICE_HIGH,i);
     if (Period()==240)  iLo4[i]=iMA(NULL,0,52,0,MODE_EMA, PRICE_LOW,i);
     else if (Period()==30) iLo4[i]=iMA(NULL,0,414,0,MODE_EMA, PRICE_LOW,i);
     else if (Period()==60) iLo4[i]=iMA(NULL,0,207,0,MODE_EMA, PRICE_LOW,i);
}

for(i=1000; i>=0; i--){ 

  if (Close[i]>iHi4[i]) ExtATRBuffer[i]= MathAbs((High[i]-iHi4[i])/FMax*10000);
  else if (Close[i]<iLo4[i]) ExtATRBuffer[i]= MathAbs((iLo4[i]-Low[i])/FMax*10000);
}

  return(0);
}
//+------------------------------------------------------------------+

Stretches from the mean beyond 5 times are the signature of the bear market.

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