Volatility Indicators
Along with volume, volatility can be used to confirm price behavior. Expanding and contracting ranges highlight the strength of breakouts and trends.
Lack of confirmation may warn of a reversal.
Types of Volatility Indicators
Based on Daily Range (High - Low)
- Chaikin Volatility
- Volatility Ratio
- Average True Range
- Choppiness Index
- Twiggs® Volatility
- True Range
Price compared to Moving Average
Author: Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.
Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.