Volatility Definition – What is Volatility? | CFI VU


If the price of the asset is unstable and changes frequently, with big spikes from time to time, the asset is said to have high volatility. On the other hand, if the price is consistent and stable over a long period, the asset is said to be less volatile. As a new trader, you must decide if trading during the highly volatile trading session is part of your strategy or if you feel more comfortable during times of quieter market movements. If you’re looking for a lot of market movements then you might schedule those times when different trading sessions overlap into your trading strategy. These timings can vary depending on which products and how many different asset classes you trade.


The commodity market is characterized by high near-term volatility. Sometimes, even a relatively small incident can cause a large swing in prices. In 2020, crude prices plummeted to the point where there was more supply than demand and companies were paying people to take the oil off their hands. Especially in Saudi Arabia, which is among the world’s largest oil-producing countries.


The volatility calculator helps traders employ money management strategies by reducing their position sizes at times of high volatility. It computes historical volatility in real-time for each currency pair using past information on exchange rates for several timeframes which can range from one week to one year.



Key takeaways

  • Volatility is the measure of price fluctuations on an asset over a given time period.
  • Do your research, it is important to gain some knowledge of trading and the factors impacting market prices.
  • A volatility calculator helps traders employ money management strategies.
CFI Financial Group is an award winning global financial markets provider with over 23 years of experience and regulated entities in several jurisdictions, focused on offering impeccable execution and trading conditions including very low spreads, professional services, dedicated support and powerful tools.
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Important Disclaimer:

We would like to remind that while we endeavour to provide best possible services, Credit Financier Invest Limited provides execution only services and any information, reports, opinions, commentary or other materials he receives from CFI directly or from its employees or through any analytical tools provided to him or third party research provided to him from the Company shall not be deemed as investment advice and it cannot be relied upon to make investment decisions. The Client commits to make his own research and from external sources as well to make any investment. The Client accepts that CFI will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. The contents of any report provided should not be construed as an express or implied promise, as a guarantee or implication that clients will profit from the strategies herein, or as a guarantee that losses in connection therewith can, or will be limited.

Forex and CFDs are leveraged products that incur a high level of risk and a small adverse market movement may expose the client to lose the entire invested capital. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. The possibility exists that you could sustain a loss in excess of your deposited funds even if a stop loss is used and therefore, you should not speculate with capital that you cannot afford to lose and be aware of trading risks. Credit Financier Invest Limited provides general information that does not take into account your objectives, financial situation or needs. The content of this website must not be interpreted as personal advice. Please ensure that you understand the risks involved and seek independent advice if necessary.

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