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Trading Binary Options: Strategies and Tactics by Abe Cofnas

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CHAPTER 6

Advanced Technical Analysis: Volatility Tools

Beyond basic technical analysis of chart trend direction and chart patterns, there remains one more significant category of technical analysis that can give binary option traders an edge. It is the category of volatility tools. There are many of them. Let’s take a closer look.

Defining Volatility

First let’s clarify what volatility is before delving into its technical aspects for trading. Simply put, if prices stayed stable and within a small range over any period of time, then volatility would be minimal. Volatility is a measure of the swings in price action and the rate of change of those swings. The trader experiences volatility by seeing the market easily excited. This is in contrast ...

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