How to profit from volatility in the forex market?
Market turning point. When the prices touch the top or bottom of the bollinger band and momentum turns down, this is a an indicators to take profit or look for a contrary a trading opportunities.
Awesome tips here 
Very good information and awesome tips for volatile market. Thank you for this post.
market volatility is suitable for scalping .It should be try after good experience and money management .You can get good pips in second or minutes. You need a quick reacting mind which can do right decisions at right move of the market.
thank you very much, very helpful information. As we know, that market prices are always volatile. To get maximum results, we must discipline. With discipline, then we can minimize the risks resulting from market prices always fluctuate.
agree, that discipline will make traders generate profits from volatile price movements. however, the target profit should be adjusted to the equity and the ability to withstand floating margin.
Yes being discipline we can be able to focus properly and can understand the market moves and how to make the best use of it.
yes with disciplined trade, we can make good profit on volatile market
Volatile market is good for scalping . scalper collect quick money in this type of market. Scalping is risky and quick method of trading where they open positions for just few seconds , try to make profit with volatility of market.
the only way to profit in a volatile market is to locate the trend and follow the trend. Your charts and candles will help you locate the trend. But there are days when the market are so volatile for me, what I do on such days is just stop every trend and study the movement of the market for the rest of the day.
Many in the forex market may see volatility in the market as not welcoming, but for a trader who knows his way (or who is ready to learn those clever details), volatility is big time lucrative, you can lose big or WIN big too. Sure, for example investments that are too "stable" and less exposed to risk don't return much and climb too slowly in profit making; for example Savings. But in forex, it is the other way round. What makes it more fun is that if you know the game well you can play around price fluctuations (however harsh) in such a way that you win more and lose less in such a way that your losses are such an insignificant fraction of your profit.
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Most retail forex traders only know how to place directional trades, and miss the chance to profit on volatility.
Everyday there are economic data from US, UK or Europe, namely Non-farm payroll, New Homes Sales, Unemployment, Personal Income, CPI, PPI etc; some of these datas can move the forex market rather wildly. So to trade volatility is the best strategy for days like that.
Two ways you can profit from volatility:
1. Long strangle
Long strangle involves going long (buying) both a call option and a put option of the same underlying security. The owner of a long strangle makes a profit if the underlying price moves a long way from the current price, either above or below.
2. Buy Out in binary option trading
Buy Out in binary option trading is similar to long strangle. In the binary trading platform, traders can choose to bet that a particular currency pair is going to close of the range by the expiration time of the contract. Sounds complicated?
Here is a real example:
On 2nd June 08, there were 3 economics data announcements:
ISM Manufacturing
Construction Spending MoM
ISM Prices Paid
So that day would be a good opportunity to trade volatility.
I placed US$300 bet on OUT trade, betting that USD/CAD will close out of the 0.9921-0.9951 range by 5am China time. The odds is 0.565; if I win I profit US$169.50, if I lose I lost US$300.
Eventually USD/CAD closed at 1.0012 at 5am China time, so it was out of the 0.9921-0.9951 range. So this trade I profited US$169.50.
Full details of the transactions here.
There are many binary trading platforms available in the market, just search for "binary trading" in Google you will be able to find a varieties of trading platform. The one that I have been using is www.mansion118.com.
So what are the pros and cons of trading volatility using strangle and binary options?
For binary option trading the odds are predetermined, so even though that particular currency pair that you are betting moves very far out of the range, your profit is limited to the odds of the trade. But for strangle, your profit will not be limited; The further the currency pair moves, the more profit the trader will gain.
To create a strangle can be quite expensive for a retail trader. 1 lot of currency option usually costs more than US1000. Some financial institutions are only willing to sell a strangle to you only if your strangle makes up of 4 options (not 2 optios). So this means a strangle can easily cost more than US$4000 for 1 trade. But for binary option trading, retail trader can place a bet as small as US1.
For more of the forex trading ideas, you can go to: http://BinaryTrading.blogspot.com/
Economics calendar can be found at the bottom of the mentioned website, this is a good reference for volatility traders. The important of the data is shown in the bar.
And the most important point is that this website is free for viewing.