Probability Cone

Overview

Projects a statistical distribution cone forward, made up of 3 levels, calculated from the charts Historical Volatility, Implied Volatility, or Average True Range values.

The assumptions used with these projections are:

• Approximately 68% of price stays within the first level of the cone.
• Approximately 95% of price stays within the second level of the cone.
• Approximately 99.7% of price stays within the third level of the cone.

When the charts price sits between the first and second levels, the statistical probability of a reversal is higher.

To add the tool to your chart, select the tool from the Ehlers tool group, and left-click on the chart to add the tool. Optuma will then draw the tool directly on the chart at the location you clicked.

Actions & Properties

Actions

• Copy Data to Clipboard: Will copy the tool’s values to the clipboard which can then be inserted into a spreadsheet, for example, allowing for further analysis.
• Add to Toolbar: Adds the selected tool to your custom toolbar.
• Apply Settings to All: When multiple Probability Cone tools have been applied to a chart, page or workbook, this action can be used to apply the settings of the one selected to other instances of the tool. This is a great time saver if an adjustment is made to the tool - such as line colour - as this allows all the other Probability Cone tools in the chart, page or entire workbook to be updated instantly.
• Copy Tool: Allows you to copy the selected tool, which can then be pasted onto a different chart window.
• Move to Back: If the tool is displaying in front of other tools or indicators clicking this action will move the tool view to the background.
• Move to Front: If the tool is displaying behind other tools or indicators on the chart, clicking this action will bring the tool to the forefront.
• Restore Default Settings: Click this action if you have adjusted the default settings of the tool, and wish to return to the standard properties originally installed with Optuma.
• Save Settings as Default: If you have adjusted any of the tool’s properties (colour, for example) you can save the adjustments as your new default setting. Each time you apply a new Probability Cone to a chart, the tool will display using the new settings.
• Delete: Deletes the tool from the chart.

Properties

• Tool Name: Allows you to adjust the name of the tool, as it’s displayed in the Structure Panel.

• Probability Levels: Allows you to add or remove additional levels to the Cone.

• Volatility Type: Allows you to select how the cones projection is calculated. The options are Implied Volatility, Historical Volatility and Average True Range.

  • Historical Period: Displays if the Volatility type is set to Historical. This field lets you select how many bars are included in the calculation.
  • Implied Value: Displays if the Volatility type is set to Implied. This field lets you select the applied volatility value you want to use in the calculation.
  • Base ATR: Displays if the Volatility type is set to ATR. This field lets you select the Base ATR value you want to use in the calculation.
  • Multiplier: Displays if the Volatility type is set to ATR. This field lets you select the Multiplier value you want to use in the calculation.
    

• Use Higher Timeframe: Allows you to use a time frame higher than the chart to calculate the cones values from.

• Higher Timeframe: When Use Higher Timeframe is enabled, this drop down menu will display, showing a list of available time frames to select.

• Tool Transparency: Use this slider bar to adjust the transparency of the tool. Moving the slider to the left will increase the transparency of the tool.

• Lock Tool: Tick this checkbox to lock the tool in place, disabling the ability to move the tool or modify the tools properties.