I came across the term maximals in this article. Can someone explain what a maximal curve is and how you would calculate it?
The article says: Taking the volatility as input these curves will tell me the probability of a maximum price (either up or down) being reached.
Using standard deviation of price data a volatility is calculated into a pips per hour number. That's nice. Based on that calculation the "maximal" gives probabilities that a market moves a particular distance over a particular time.
Therefore this "maximal" can be used as a probability for stops and profit targets being hit, because they are set a certain distance away from a current price.
The problem is historical volatility is not a guide to future volatility.
I guess what you could do is get into a trade, set your stops and targets for a particular time using these maximals, and if they aren't hit - given a margin for error - you take profit anyway because the calculations were "wrong".