How to predict if a market will be volatile? | Traders Hideout


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How to predict if a market will be volatile?

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Sydney, NSW, Australia
 
Trading Experience: Intermediate
Platform: NinjaTrader with Jigsaw DOM
Favorite Futures: CL, 6E, ES, Piano
 
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Posts: 255 since Nov 2014
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One indication I always am on the lookout for is how many resting orders are stacked on the DOM.

These 2 screenshots are for CL, for two different time periods. In one you can see that each level has a depth of between ~70 and ~140, whereas in the other they are between ~30 and ~60.

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Generally speaking a thicker market is less volatile, given volatility and liquidity resting on the DOM are inversely correlated.

Day is most volatile during US session then european then asian session I dont bother with the asian session

Understanding yourself is just as important as understanding markets.
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