What is Volatility?

Volatility is how much a price fluctuates over a period of time. A market with a high and erratic price range is said to have high volatility. In a high volatility environment price candles usually have long wicks, you can see a mix of red and blue candles.
 
Volatility can be caused by a range of different factors, e.g.;

  • - Major news events
  • - Political Unrest
  • - Large shot term trades
  • - Supply and demand
   
An important part of  trading in a highly volatile market is minimising your risk should the price go in the opposite direction than what you have anticipated. Risk management strategies include limiting your leverage and trade size, diversifying your trades and putting in place stop loss orders and/or take profit orders.