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.