Volatility

How much the price is changing in a given period

💡 Higher volatility = faster price changes

⚠️ Tells you nothing about direction, just the range of prices

Bollinger bands

(» Show chart «)

» Band is narrow = quiet market.

» Band is wide = loud market.

The bands act as dynamic support and resistance levels

The price tends to bounce from one side of the band to the other, always returning to the moving average.

» Breakout below the bottom band = 📉 continue downtrend.

» Breakout above the top band = 📈 continue uptrend.

ATR = measure of volatility.

» High ATR = high volatility.

» Low ATR = low volatility.

Can for example be used when something is forming a bottoming pattern and the volatility is low = buy.