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Volatility
In one line: How much and how fast a price moves up and down.
Volatility is the price's mood swings. Calm market: small moves. Nervous market: big jumps both ways.
The SECThe US stock market regulator. describes volatility as how much an investment's price goes up and down. High volatility means bigger possible gains and bigger possible losses. It also means a Stop order can fill further away from where you put it.
Traders often measure it with tools like the ATR (Average True Range) or Bollinger Bands. Measuring it does not predict which way the next move goes.
Related
Sources & studies
- Investor.gov (SEC): Volatility
- Investor.gov (SEC): Investor Bulletin – stop, stop-limit and trailing stop orders
Last checked: 2026-11-04 · Educational, not financial advice.
Education only, not financial advice. No signals. Backtests are hypothetical: real trading can be worse. Past results don't predict future results.