What is market volatility (volatility)?

Market volatility, or so-called Volatility, refers directly to the amount of uncertainty, risk and fluctuation that occurs in the market and all price changes over a given period in the financial markets. There are two basic measures of volatility in operation – historical and expected.

During periods of high market volatility, prices tend from dynamic, rapid changes in the short term.

Volatility usually occurs due to changes in macroeconomic data or after unexpected world events – political changes or natural disasters.

How do you take advantage of market volatility in your operations?

Experienced traders are characterized by the ability to take advantage of emerging changes. Observing the situation in the world, they try to take advantage of it – to open and close positions in a short time.

Some suggest visually measuring volatility. Remember that volatility refers directly to the rate of market change. A volatile market is one in which the price changes rapidly over a short period of time.

In most cases, the level of liquidity directly affects data from technical analysis. The more liquid the market is, the more effective technical formations and breakouts can be. A market characterized by low liquidity can also become volatile. So the moment you decide to use the maxima and minima of a candle that has formed in a time of increased volatility – use common sense.