A Technical Approach To Trend Analysis: Practical Trade Timing for Enhanced Profits
by Michael C. Thomsett
Calculating Volatility
A few methods for defining and calculating volatility might help manage trends and spot possible changes in the future. However, the number of points of a stock’s movement is not a reliable volatility test. The scaling of a chart determines volatility as a relative matter. For example, a chart scaled in one-point increments and experiencing a three-point move might be extremely volatile (based on typical daily price changes). However, another stock scaled with ten-point increments and experiencing the same three-point move might not show increased volatility. It could point to low or declining volatility, due again to the relative point change in a typical session versus the three-point move itself.
Another way to define ...
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