All You Need to Know About Right Trading Strategy
While trading volatile stocks, you must always implement right trading strategy. The volatility helps the traders in implementing right trading strategies at right time. In case the technical analysts and traders want to implement option strategy then it is very important to know the volatility of the stock.
In this post, you will get to learn three frequently used strategies that are discussed to measure the volatility of the stocks. One of the most prominent strategies is high minus low, which is used to evaluate profit margins for a security over the short- and long-term.
Next Strategy that is usually used by the analysts to measure the volatility of the stocks is Average True Range. Average True Range indicator is almost similar to the high minus low indicator but it also take into the report of overnight gaps in its formula. ATR is known to calculate the average value over 14 days but the technical analysts use it for any time period according to their need for greater sensitivity. The ultimate goal of the ATR indicator is to find out the present and possible volatility of the stock from historical prices