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Trading Glossary

Volatility

Basics

What it means

How much and how fast an asset price swings. High volatility means large price moves in short periods; low volatility means calm, small moves.

Example

A stock that moves between $98 and $102 over a month is low volatility. A crypto token that swings from $0.50 to $1.20 in a day is high volatility.

Mistake beginners make

Beginners chase high volatility for big wins but forget it works both ways -- the same instrument that doubled in a day can drop 60% the next.

Related terms

  • Volume — The total number of shares, contracts, or coins traded during a period. It shows how much …
  • Trend — The overall direction price is moving over a period. Up trends make higher highs and highe…

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