Volatility
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Volatility describes how much price moves over a given period. High volatility means larger, faster swings and wider ranges; low volatility means quiet, compressed trading. Volatility is not direction — a market can be highly volatile while going nowhere. It rises around major news, session opens and central-bank decisions, and it decides how far stops and targets need to sit.
Full explanation
Volatility is normally measured with ATR, standard deviation or implied volatility from options. It clusters: busy periods follow busy periods and quiet periods follow quiet ones. Volatility expands around high-impact releases such as inflation and employment data, and contracts through holidays and thin sessions. Sensible practice is to scale stop distance with volatility and reduce position size as volatility rises so risk per trade stays constant.
Why traders watch it
Position size, stop distance and realistic targets all depend on volatility. Trading a fast market with quiet-market settings is how accounts get stopped out on noise.
Related indicators
Asian session
The overnight session driven by Tokyo, Sydney, Hong Kong and Singapore, typically quieter and range-bound.
Clear direction
When one side is plainly in control: price makes progress one way and pullbacks are shallow.
Consolidation
A pause in which price moves tightly sideways, often after a strong move, while the market absorbs it.
First spike
The sharp, immediate move in the seconds after a release or a level breaks — usually the least reliable part of the whole move.
High-impact news
A scheduled release with a strong record of moving markets sharply — for example inflation, employment data or an interest-rate decision.
Holding a move
When price stays at its new level after a move instead of drifting back — the sign that the move was accepted.