Measurement methods for fluctuations

When we are looking for good breakthrough trading opportunities, we can leverage volatility.

Volatility measures the overall price fluctuation over a period of time, and this information can be used to detect potential breakout trends.

There are some indicators that can help us measure the current volatility of exchange rates. When we are looking for breakthrough opportunities, utilizing these indicators will greatly help us.

1Moving average

The moving average is likely the most common economic indicator used by traders, and although it is simple to use, the information provided is priceless.

Simply put, the moving average measures the distance betweenXThe average market movement over a period of time,XCan be set according to your own preferences.

For example, if you prefer to use it in a daily chart20 SMASo, the moving average shows the past20The average price trend of the day.

Of course, there are also other categories of moving averages, such as index weighted moving averages, but the purpose of this lesson is not to discuss these details in more detail.

If you want to learn more about the moving average, or if you only need to review this knowledge, you can go back to our fourth grade elementary school course for learning.

2Bollinger Bands

The Bollinger Bands are an excellent tool for measuring market volatility, as they are also a strong point of the Bollinger Bands.

Bollinger bands are usually composed of2The standard deviation of bars is2These two lines are distributed in theXAbove and below the moving average during a certain period of time,XYou can also set it yourself.

For example, if you wouldXSet the value to20So you will get20SMAAnd the other two lines. One is that the standard deviation is+2The other line is the standard deviation of-2The line.

When the Bollinger Bands contract, it indicates a decrease in volatility;

When the Bollinger Bands expand, it indicates an increase in volatility.

3、ATRindex

The last available indicator is the true average regional indicator(ATR)。

ATRIndicators are also very effective indicators for measuring volatility, as they tell us about the pastXThe average fluctuation range over a period of time,XAlso set according to our preferences.

For example, if you set it on a daily chartATRThe indicator is20So what it shows is in the past20The average trading range of the day.

WhenATRWhen declining, it indicates that market volatility is decreasing, and whenATRWhen rising, it indicates an increase in volatility.