Volatility is the speed and amplitude of an asset's price change over a period of time.
High volatility — price moves actively. Low volatility — price changes slowly.
Signs:
Large candles on chart
Wide movement range
Rapid direction changes
Advantages:
More earning opportunities
Fast profits
Risks:
Higher probability of losses
Stop-losses trigger more often
Requires quick reaction
Small candles
Narrow range
Sideways movement
Less stress
Predictable movement
Limitations:
Fewer earning opportunities
Requires more time
News and events — volatility drops before news, rises after.
Trading time — higher during active hours, lower at night.
Market sentiment — panic or euphoria increase volatility.
Reduce position size
Widen stop-loss
Take profits more frequently
Use tight stop-losses
Look for range breakouts
Be patient
Last updated 1 month ago
