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Lesson · Trading Academy · Intermediate

Volatility

Price range, ATR and how volatility affects position size.

Volatility measures how strongly the price changes. It says nothing about the direction of the move.

ATR (Average True Range) is the average “true” range of a candle over a period, taking gaps into account.

The higher the volatility, the wider the stops and the smaller the position should be for the same risk in money.