Forex - Volatility

Volatility Calculation Formula (Standard Deviation): The standard deviation of price data over a specified time period is employed to assess market volatility.

The formula is represented as follows:

Volatility = sqrt(1/n * Σ((Price - AveragePrice)^2))

NOTE: In this formula:

n represents the number of periods.
Price denotes the price at each period.
AveragePrice refers to the average price over the specified period.

Calculating volatility, provides an insight into the magnitude of price fluctuations, which aids in decision-making.

Average True Range (ATR)

ATR measures market volatility.

ATR provides information about the potential range of price movement, aiding in setting appropriate stop-loss and take-profit levels.

Volatility