is a measure of how much price deviates from its average in a specific time period that can be set. The more price fluctuates, the higher the indicator value.
Please note it does not measure the direction of price changes, just how volatile price has become.
There are several reasons to care about volatility but it’s mainly a risk measure. As volatility increases, so does risk and uncertainty and vice versa.
Traders can use the indicator to flag instruments with high volatility which could point to a trend change.
It is often used in combination with other signals.
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