Gold/Silver Ratio issues

[Hapy_man888]

Hi everyone!
I'm a complete newcomer to futures trading and to take first steps here I decided to start from spread trading that is way easier and less expensive).Unfortunately, not always a great article is fully explained so that everyone can understand it.A few days ago, I came across an article for year 2010 about Gold&Silver Spread Ratio...the only stuff I can't grasp is how to calculate a probability of a breakout through a standart deviation.For example: volatilty is at 21.4%; over the past year, the average for the ratio was 64.5-to-1; what's the odd that in 30 days the volatility will break out through 78.3 (result is 0,2%)/ in 60 days (result is 2,3%)/ in 90 days (result is 6.5%)).Could you please explain to me how we got this numbers?
Thank you <3.

 

[bone]

...the only stuff I can't grasp is how to calculate a probability of a breakout through a standard deviation.

Just my opinion - you really can't calculate a realistic probability. The correlation between Gold and Silver is high but by no means perfect - if you run into some disconcerting Central Bank or Economic News there can be a rather severe co integration issue that could conceivably stop you out before "normalcy" returns to the relationship.

 

[themickey]

I trade gold and silver but more swing trading than day, I also use lots of data to calculate stuff.
These are my conclusion; Both gold and silver behave more like fx than market indexes or sectors, at most mainly unpredictable, I suspect market manipulation being a big part of the issue.
In general silver is twice as volatile (~100%) as gold short term (daily).

The best I can do to gauge direction and the authenticity of a gold price move/swing, is to observe the major gold stocks and watch how they are behaving. Eg, if for example gold price leaps up hard and Newmont is lethargic, then gauge the gold move as dummy.
Further, the Australian gold index and major ASX gold stocks are another good bellwether.
Often if you see XGD.AX move strongly, its a pre warning US gold will move too, this because Australia is a major gold producing country with a large chunk of gold stocks.

 

[SoyUnGanador]

I trade gold and silver but more swing trading than day, I also use lots of data to calculate stuff.
These are my conclusion; Both gold and silver behave more like fx than market indexes or sectors, at most mainly unpredictable, I suspect market manipulation being a big part of the issue.
In general silver is twice as volatile (~100%) as gold short term (daily).

The best I can do to gauge direction and the authenticity of a gold price move/swing, is to observe the major gold stocks and watch how they are behaving. Eg, if for example gold price leaps up hard and Newmont is lethargic, then gauge the gold move as dummy.
Further, the Australian gold index and major ASX gold stocks are another good bellwether.
Often if you see XGD.AX move strongly, its a pre warning US gold will move too, this because Australia is a major gold producing country with a large chunk of gold stocks.

I cannot vouch for this post, but it seems very logical and well thought out. Thanks themickey, I definitely need to study it.