Historical Volatility is a measure of movements of prices over a specified period of time. It deals with measuring the level of price fluctuations of stock prices from its average price over a specified period of time. It helps trader quantify how volatile a stock is and how likely it is to show extreme moves. […]
Category: Volatility indicators
Volatility with the market can be measured in various ways. Several indicators let traders chart volatility so they can encompass it in their trading.
Both the Bollinger Bands Width and the Bollinger Bands %B are indicators based on the Bollinger Bands. The Bollinger Bands Width indicator shows the width of the bands (how wide they are at any moment). The Bollinger Bands %B indicator shows the relative position of the price within (or outside) the bands. Bollinger Bands Width […]
Implied volatility (IV) is a measure that helps traders to understand the chances of changes in the prices of a given security. In options, IV is the underlying instrument’s volatility. Implied Volatility? What is it? Implied volatility (IV) is a measure that helps traders to understand the chances of changes in the prices of a […]
The Keltner Channel is a volatility based indicator. It indicates whether the market’s trend is likely to continue or it may change direction. It is generally built with a 20-period EMA as the center line and two lines above at a 2 Average True Range distance. The Keltner Channel is a volatility based indicator that […]
The Choppiness Index indicator is a volatility indicator. It determines whether the market is following a trend or the market is choppy and trading sideways. The Choppiness Index indicator is a volatility indicator that determines whether the market is following a trend or the market is choppy and trading sideways. It determines only the choppiness […]
John Bollinger created the technique of using a moving average with two trading bands below and above it. He introduced this technique in the 1980s and he trademarked this term in 2011. Bollinger was a long-time technician of the markets. Previously, it was known as trading bands, but with time, he evolved this concept and […]
The Donchian Channel indicator is an intraday trend following indicator that allows you to identify trends. As we all know that trade breakouts is a popular trend following strategy. Breakouts can be conveniently measured through the lowest low and highest high. It functions to plot three types of bands. The first band is an upper […]
Average True Range (ATR) indicator is one of the most influential technical analysis tools that track volatility in a predefined period of time. Unlike most of the indicators, ATR does not identify trends and only focuses on measuring volatility in a particular market. However recent developments suggest that most of the traders have added ATR […]