AVERAGE VOLATILITY

The Average Range Table displays the average daily range for the last 4 weeks and 13 weeks in both % and pips.

The table can be used to quickly identify increasing and decreasing volatility.  In general, volatility is increasing if the 4 week average range is greater than the 13 week average range an decreasing if the 4 week average range is less than the 13 week average range.

In general, I’ll concentrate on markets that are moving more (higher ATR).  ATRs of at least 2% are preferred for my style of trading (more likely to follow through on technical events and respond quickly to support/resistance) and are said to have a higher ‘tradeability’.  The figures are also helpful in determining risk on trades.  For example, one may prefer to risk no more than a specific fraction or multiple of ATR.

 

Screenshot 2014-09-03 19.12.47

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