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| Volatility tends to increase through the early phases of a new trend, decrease in the middle and peak as it climaxes into a sideways range. Volatility then declines gradually through the congestion, while volume dries up and price bar range narrows. Volatility spikes and valleys define extremes for momentum and swing traders. Volatility indicators, such as this one tracking AMZN, use bar range analysis and price expansion to produce output. If you don't want to do the math, visually examine bar range development within Bollinger Bands and the data will be just as valuable. |
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