How Volatility plays a vital role in Forex' plz explain?
If prices don't change, if they don't move up or down, there is no potential to make profit. The profit comes form the difference between the price where you entered and the price where you exited.
Volatility can be objectively measured using the ATR indicator, derived form the average range from high to low of the last so many bars, often 14, sometimes 20, but can be any number you wish. This tells you how volatile two different instruments are compared to each other and for each whether their volatility is increasing or decreasing.
Volatility can be objectively measured using the ATR indicator, derived form the average range from high to low of the last so many bars, often 14, sometimes 20, but can be any number you wish. This tells you how volatile two different instruments are compared to each other and for each whether their volatility is increasing or decreasing.
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EURUSD 1wk volatility in options market 7% which means options market implies a 7% annual move up or down in EURUSD 1wk option tenors. Currently options have a risk reversal in favour of EUR which means mkt favours EURUSD upside.
