/ Trading

The In Play Index (IPI) revisited

The In Play Indicator (IPI) for day trading Asia was introduced on Wednesday to much applause and throwing of flowers.

After the pure adulation died down, it seemed while the idea was well received, the representation of it was not to most people liking. With no official value spitting out the other end, as well as no historical representation, testing my outlandish claims was impossible.

So, to help those that feel aggrieved, I have updated the indicator to now display as an oscillator (oh squiggly liners rejoice!). The IPI now displays like so:

http://adamjowett.com/content/images/uploads/2012/03/2-03-2012-5-11-04-PM.png

The IPI does a decent job of showing where in the past the volatility vs spread ratio is working in your favour. For the Asian session traders, the dips below 0.3 show when the range is in your favour to day trade a historically quiet session.

The IPI confirms what I see every day as I trade the Asian session. Tokyo open, and the period between the Sydney close and London open are where you are going to see how your trade is really going to turn out.

It also shows what we already know, that the London session, as well as the first half of the US session has excellent spread vs volatility ratios. What you can’t see above, but will if you place this on your chart, is on some pairs, this ratio becomes unfavourable again in the latter half of the US session.

Below is the download for the new version of the IPI, I hope it is of some use to you.

Happy trading.

Download the In Play Index (IPI) indicator