## Volatility

**Volatility** is a general term used to describe the magnitude, or speed, of historical price fluctuations independent of their direction. Generally, changes in volatility tend to indicate a change in prices.

The **Volatility** indicator can be used to confirm trends or changes in direction. Continuing trends will usually display lower levels of volatility, while higher levels of volatility will frequently be encountered around changes in direction.

#### Method of Calculation

The calculation of **Volatility** starts with the current interval's **True Range**, and then multiplies it by the preceding interval's volatility value, which was first adjusted by the periods setting.

##### True Range Calculation

Refer to the Average True Range topic for a full explanation of the formula used to determine the **True Range**.

##### Volatility Calculation

When the **True Range** is determined for each interval, then the **Volatility** calculation can be made, based on the prior day's **Volatility** level, and the number of periods set by the user.

The **Volatility** formula is as follows:

**Note** - Whenever the **Period** number is changed, the indicator will be recalculated and both the prior day's volatility level, as well as the current day's volatility level, will change.

#### User Settings

##### Period

The user can set the number of periods to use in the **Volatility** calculation.

The more periods used, the smoother the **Volatility** display will be.

Type in a whole number in the **Periods** text box in the **Parameters** tab of the **Volatility Properties** dialog box.

##### Display

The **Volatility Range** is displayed in an indicator window below the price chart.

The exact display of the plot is controlled on the **Plots** tabbed page of the **Volatilities Properties** dialog box.

The **Style** selected for the plot can be one of the following: **Solid, Dashes, Dots, Points, Histogram** or **Step**.

Once the style is selected the **Color, Weighting** and **Visibility** can also be controlled from this page.

The **Scale's** display is controlled from the **Scale Settings** and **Scale Appearance** tabbed pages.

## Related

- Indicator Type Settings
- Indicators
- Using Indicators
- Indicator Properties
- Signals on Indicators
- Comparative Indicators
- Relative Strength Comparison
- Fundamental Indicators
- Annual Fundamental Types
- Daily Fundamental Types
- Momentum Indicators
- DMI
- Momentum
- Parabolic SAR
- Rate of Change
- Thermometer
- Volume Momentum
- Moving Average Indicators
- Bollinger Bands
- Ichimoku
- MACD
- Mov Avg Bands
- Mov Avg Displaced
- Mov Avg Exponential
- Mov Avg Simple
- Mov Avg Weighted
- Oscillators
- Commodity Channel Index
- Oscillator
- Relative Strength Index
- Standard Deviation Channel
- Stochastic
- Volume Oscillator
- Williams %R
- Trailing Stop Indicators
- Trailing Stop ATR
- Trailing Stop FXTE
- Trailing Stop Percentage
- Trailing Stop Price
- Trend Indicators
- Highest High
- Lowest Low
- Pivot Points
- Swing Indicator
- Swing Overlay
- Volatility Indicators
- ATR Welles Wilder
- Average Range
- Average True Range
- Statistical Volatility
- Volex
- Volume Indicators
- Accumulation/Distribution Line
- Chaikin's Money Flow
- On Balance Volume
- Open Interest
- Volume
- Indicators Criteria

## Comments