Volatility
The magnitude and speed of price changes over a period.
Plain languagePractical exampleConnected reading
01
What is it?
The magnitude and speed of price changes over a period.
02
Why does it matter?
Position size, margin and risk limits are sensitive to volatility.
03
How should it be read?
Compare series calculated with the same window, currency and data frequency.
04
Common mistake
Equating volatility only with downside; sharp gains also raise it.
A simple example
Larger daily moves raise realized volatility even if the overall direction is unchanged.