The most volatile forex pairs in the forex market today are GBPUSD and USDZAR. Check out the most interesting buying and selling opportunities right now!
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The Forex Price Surprises page lists the most volatile forex contracts, ranked by standard deviation, compared to their past 20-days of data. The page is re-ranked every 10 minutes, and new contracts may be added to or removed from the bullish and bearish tables based on newly calculated data.
A Bullish trend is one where there is an upward trend or rising direction in the market. Contracts listed on the Bullish Trends table are those whose standard deviation has risen over the specified time period.
A Bearish trend is one where there is a downward trend or falling direction in the market. Contracts listed on the Bearish Trends table are those whose standard deviation has fallen over the specified time period.
The Chart View displays a graph showing Bullish Momentum as green bars (higher standard deviation), followed by Bearish Momentum as red bars (lowest standard deviation).
About Standard Deviation
Price movement on the Price Surprises page is defined in terms of the number standard deviations a contract has moved in the latest trading session. Defining price movement in terms of standard deviations is preferable to using percentage change because using standard deviations puts all the forex contracts on a level playing field. There are categories of currencies that are typically more volatile and have larger percentage price changes than others. If we used percentage change to define price movement, then high-volatility forex contracts would always dominate the Price Surprises list and we would miss lower-volatility forex contracts that might have an unusually large movement on a particular day.
In order to calculate the number of standard deviations that a contract moves in the latest session, we use the following formula:
Today’s price movement in terms of number of 20-day standard deviations = ln (latest close/previous close) / ((20-day historical volatility/100)/square root of 252))
The movement of a forex contract in terms of its standard deviation is also useful to traders because it can be translated into probability terms. According to the normal distribution bell curve, a forex contract will show a move of less than one standard deviation (plus or minus) about two-thirds of the time, a move of less than two standard deviations 95% of the time, and a move of less than three standard deviations 99% of the time. Thus, if a trader sees a forex contract that has moved 3 standard deviations, the odds of that event are only 1% (or 1 in 100), meaning that contract is showing a major move from a statistical standpoint that is outside the realm of normal statistical expectation.
We provide these charts daily, and let you know the latest trends in the forex market today. Check out updated charts on Barchart.com.
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