Volatility is a term used in trading to describe how prices or returns for a given asset or financial instrument vary over time. Because volatility generates profit potential, it is a critical statistic. Volatility trading, on the other hand, might result in losses if traders do not understand the necessary knowledge and tactics.
Volatility is measured by price activity. Traders are so both trading and causing volatility with their actions. Traders can determine if a price move is likely to maintain itself or whether it has run its course by examining how far or fast prices move.
You may create effective trading techniques that help you exploit profit potential by knowing volatility. Trading risky assets, watching changes in volatility to guide selection, and adding volatility-based technical indicators or algorithms can help.
PLEASE COMMENT AND SUBSCRIBE @InvestorsTradingAcademy
Investors Trading Academy