Ultimate Volatility Expert is a system created based on ADM(Average Daily Movement). It is a system based on breakout trading and quite similar to Open range breakout trading. And here the breakout levels are decided based on the ADM movement. The credit goes to the system creator Mr Murali Krishna
What is Average Daily Movement?
Average Daily Movement(ADM) is nothing but the average price movement of last N day (High-Low). And in Ultimate Volatility Expert ADM play a major role in deciding the Breakout and Target Levels.
How the Breakout Levels are decided?
Breakout levels are decided when the current price breaks above (prev day close + 0.382*ADM) level which generates the Buy Signal and when the current price break down below (prev day close – 0.382*ADM) levels generates the sell signal
How the Target is Decided?
Risk Reward Ratio
1. low risk reward= 1:1 , Example: Target is minimum 1/2 ADM points and stop loss also same points (normal Profit)
2. medium risk reward= 2:1 , Example: Target is minimum 1 ADM points and stop-loss is 1/2 ADM points (good Profit)
3. high risk reward= 3:1 or above , Example: Target is minimum 1 1/2 or 2 ADM points and stop-loss is 1/2 ADM points
Left side of the window show Monthly, Weekly and Previous day High Low Levels, this levels are major Support and Resistance levels for trading,(PDH = Previous day High, PDL = Previous day Low, CWH= Current week High, 1WH= first week high CMH= current Month High CML= current Month Low etc.)
The System Creator recommend to set target & stop-loss levels with minimum 2:1 ratio, and also to lookinto the left side dashboard for major Trading levels. And the ideal timeframe for trading this strategy is 5min
Download Amibroker AFL code
Download the Ultimate Volatility Expert System – AFL code