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Market Volatility
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2. Market Volatility explained
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3. Volatility – the way to describe market
movements
In its simplest form volatility really describes the pace at
which prices move higher or lower, and how wildly they swing
Market Volatility explained
Markets
These can be prices of just about anything. However,
Volatility has been more exhaustively studied, measured and
described in Financial Markets
It really just measures the changing of a market’s price
relative to time
It would then follow that Markets prone to high volatility
present to us as traders much more opportunities

4. Markets
Low Volatility
This typically describes a Market that is not moving
very much or has a low price change relative to time
Traders who seek to make profits from small movement typically
favour such an environment or set of circumstances
Most traders who are employing scalping techniques (trading short
term movements) might trade certain markets based on their
volatility – simply because it is more favourable to them or more
conducive to their strategy's’ success
Market Volatility explained

5. High Volatility – the scary one!
Most investors tend to steer clear of highly volatile markets –
many see it as too risky
Sometimes analysts may use historical volatility - how much
volatility an asset has had over the past 12 months – as a way
to gauge or estimate future volatility. Some may use Monte
Carlo methods
In finance, Monte Carlo methods are used to simulate the various
sources of uncertainty that affect the value of an asset, and then to
calculate a representative value given these possible value of the
underlying inputs
Markets
Based on the calculations and outputs an investor may make
decisions he sees as ones that encompass all possible scenarios
Market Volatility explained

6. Markets
The Conclusion
In general, price volatility can be caused by factors that
produce wild swings in demand and supply
They can also be affected by human emotions - this
makes predictions harder
Our method uses a more favourable approach of position sizing based on
volatility – this keeps us out of being overly dependent of one market, or
even having our overall portfolio exposure affected by certain volatility
As technical traders we use recent facts and established patterns to base our
future predictions upon
The classical Economic way to calculate Volatility is it is computed as the annualized
standard deviation of the percentage change in the daily price.
http://www.businessdictionary.com/definition/volatility.html#ixzz3VVgvplzS
Market Volatility explained

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