Have you ever found yourself waiting for a good entry on a promising campaign just to see the market take off without you before you snatched a seat on the bus? Or perhaps you managed to get a good fill near an important inflection point but then had to watch the tape push sideways for hours or even days on end? Volatility is a double edged sword – it is the force that drives all markets and therefore leads to profits as well as losses. But more often than not it seems that volatility happens when we don’t expect it, but rarely when we do want the tape to start moving. Well, that is until now…
I am proud to announce that the Evil Speculator managed to secure the services of infamous Sith Lord Darth Mole, a powerful convert to the dark force bent on sticking it to the Republic, and who has sworn his obedience to our nefarious cause. As our infamy and rumors of our evil deeds are making their way throughout the trading galaxy the services of Darth Mole will play an important part in our mission toward market domination. I know what you’re thinking – he sure looks evil, but what does he do?
Well, he seems to be really good at digging tunnels, which may come really handy if one of our evil schemes happens to backfire. But more importantly he also excels at predicting volatility – it’s almost uncanny. The blue outlined candles on this hourly EUR/USD chart shows you where Darth Mole sent us a warning. The yellow ones suggest that volatility is going to die down for a while. So let’s assume you are about to get positioned and receive a high volatility alert – obviously you may want to stick around and pay attention. During low volatility periods however it’s usually safe to hold back and wait for instructions.
Here’s what happened when we let Darth Mole loose on the crude futures. Pretty nice going there, obviously the very last low volatility prediction was a candle off – one of the worms in his breakfast cereal must have been bad. Now to be clear, Darth Mole is not a directional indicator of any kind – it only tells us when to expect impending volatility and it does that very well. But knowing when the tape is about to jump is a huge stride forward in our book – once again we are one step closer to our goal of market domination.
Here are two example alerts – they are pretty straight forward. First a high volatility notice:
******* Darth.Mole.CL Volatility Alert #2 at 5:00 PM EDT ******
Darth Mole senses a looming increase in CL price volatility (i.e. larger candles) over the next few hours.
Average candle range in the past five hours: 21.4 ticks.
After things start slowing down (or Darth Mole thinks they will) you may (or not) receive a low volatility notification:
******* Darth.Mole.CL Volatility Alert #3 at 7:00 AM EDT ******
Darth Mole senses a slowing in CL price volatility. We may be heading into a low volatility period. This however does not mean price will push sideways – expect smaller counter swings and reduced candle ranges.
Average candle range in the past five hours: 43 pips.
Darth Mole sends these alerts via email as well as Jabber if you opted in (see Jabber instructions below). Notifications can happen at any time – even while you sleep. If you use Jabber make sure your phone doesn’t wake you up (unless you choose to snap to action 24×5).
Here are the symbols we are currently running:
Forex: EUR/USD, USD/JPY, GBP/USD, AUD/USD, USD/CAD, EUR/CHF, EUR/GBP
Futures: ES, GC, CL, RB, HG, ZB, ZN
If there are any other symbols you would be interested in then please let us know in the comment section below or write us at admin@.
Now if you care about volatility (and as any self respecting trader you should) then here’s your chance to give Darth Mole a test run. We’re going to make it available for FREE throughout August to show you how awesome this is and being in sync with the market’s gyration can revolutionize your trading. You can sign up right now and enjoy your free ride for the rest of the month. If you want free Jabber alerts see the instructions below.
I hope you will enjoy the new addition to our nefarious team. Please feel free to write us and share any thoughts, suggestions, or ideas on how you plan to take advantage of this new ally in your market schemes.
If you haven’t signed up for a Jabber account and are interested then please write us an email to admin@ with your current ES username and a password of your choice. We have tested several Jabber clients, so here is a list of our favorites:
For Windows there are a ton, so check the whole list. On OS X the list is a bit shorter but I like Psi – works like a charm. Usually all you have to do is to enter firstname.lastname@example.org as your login and the password you sent me in order to connect. A few clients require only the username and the server name separately but I’m sure you can figure it out – if you run into trouble please let us know.