Volatility Indicators – show magnitude of price fluctuations. Volume indicators – show the level of trader’s participation in the market. Cycle indicators – show repeating patterns in the market. Bill Bollinger bands width indicator forex best’ Indicators – represent Bill Williams trading method.
Volatility indicators show the size and the magnitude of price fluctuations. These periods come in waves: low volatility is replaced by increasing volatility, while after a period of high volatility there comes a period of low volatility and so on. Volatility indicators measure the intensity of price fluctuations, providing an insight into the market activity level. Low volatility suggest a very little interest in the price, but at the same time it reminds that the market is resting before a new large move. Low volatility periods are used to set up the breakout trades.
For example, when the bands of the Bollinger bands indicator squeeze tight, Forex traders anticipate an explosive breakout way outside the bands limit. A rule of thumb is: a change in volatility leads to a change in price. Another thing to remember about volatility is that while a low volatility can hold for an extended period of time, high volatility is not that durable and often disappears much sooner. Featuring views and opinions written by market professionals, not staff journalists.
Gold moved lower in May and it’s also down in June, but the price action is far from being spectacular. The overall volatility is still very low and the situation in the precious metals sector is simply extremely boring. But with May now being over and with a new month, new factors are likely to come into play and the odds are that this month will be anything but boring. Let’s move right to it and analyze the gold market from the long-term point of view. The Bollinger Band’s width is currently very small, which implies that a big move is just around the corner. The above is just a general technique, so some may say that there’s no specific reason why it should work in gold at this particular time. We’ve seen the Bollband’s width as low as it was recently only one time in the past and it was followed by a big decline.