Trading Indicators To Use During Volatile Periods

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Many indicators are used by traders and analysts to monitor volatility and decide the best time for entering or exiting a trade. Increased fear in the market amid significant market movements can give ideal trading ground for experienced investors, while high volatility is typically a barrier to reckless trades. Low volatility and complacency among investors, on the other hand, can signal a bubble in the market and a possible market top. It is usual to utilise the volatility index (VIX), ATR and Bollinger Bands to measure volatility relative to other indicators. At Zebu, we understand that traders and investors with very high aspirations need nothing short of the best Indian trading platform with its plethora of features and scanners. As one of the top brokers in share marketin India, we have the privilege of providing our users with their best trading accounts. VIX Volatility in the market is measured by the Volatility Index. Volatility in Nifty 50 can be measured by a ticker symbol known as VIX, which is updated throughout the trading day and reflects the current implied or expected volatility. Other traders use large institutions' volatility perceptions (as indicated by VIX) to help them gain an idea of the expected volatility of the market in the days to come. While numbers in the low teens imply minimal volatility, VIX rates above 30 indicate increased volatility. Average True Range Any stock, exchange-traded fund, FX pair or commodity can be used to apply the average true range indicator established by J. Welles Wilder Jr. ATR is a 14-day exponential moving average (EMA) of what Wilder called the "true range" of an asset's price movement. One of three following equations produces the greatest number, which is used to determine the true range. Current day's high minus the current day's low Current day's high minus the previous day's close Previous day's close minus the current day's low Finally, an EMA is produced using the ATR (computed using the highest value found when the three equations are solved). The greater the ATR, the greater the volatility of the market. There is a correlation between ATR values and quiet trading periods. Bollinger Bands There are two bands or lines that are two standard deviations above and below a 20-day moving average, which shows as a line in between the two bands, in the Bollinger Bands indication, which is another charter indicator. The wider the bands, the more volatile the market is, and the narrower the bands, the less volatile the market is. Bollinger Bands, like ATR, can be applied to any chart of a stock or commodity. You can get one of the best Indian trading platforms with its plethora of features and scanners to build your investment portfolio. As one of the top brokers in share marketin India, we have the privilege of providing our users with their best trading accounts.