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Probability Distribution for Forex Rates


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Terms of Use Methodology
9.2% 9.2% 9.2% 9.2% 9.2% 9.2% 9.2% 4% 4% 4% 4% 4% 4% 4% 4.7% 4.7% 4.7% 4.7% 4.7% 4.7% 4.7% 6.1% 6.1% 6.1% 6.1% 6.1% 6.1% 6.1% 7.1% 7.1% 7.1% 7.1% 7.1% 7.1% 7.1% 7.3% 7.3% 7.3% 7.3% 7.3% 7.3% 7.3% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3% 53.4% 53.4% 53.4% 53.4% 53.4% 53.4% 53.4%
EXPLANATION

This tool reveals to the users how are quotes likely to evolve given that the current trend and market agitation holds. Probability calculations here are based on the Brownian motion model of the market. This model makes the analogy of the quotes behaving as a random walker on a slow moving train. The position of a random walker on the train complies with a Gaussian distribution having a standard deviation that grows with the square root of the number of steps it takes. If the average number of steps per unit of time is F, then the standard deviation S becomes a function of the square root of time t.

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