Markets need volatility but often this is exaggerated and a great excuse to trap traders on the wrong side of the market. This happens because of FOMO – fear of missing out as the price action races away. This is when traders usually jump in just before the price abruptly reverses. This is where the volatility indicator comes in as it is triggered in real time so as soon as the price action is outside of its ATR (average true range) for that timeframe and traders know to expect either a reversal into the spread of the price action once the candle closes off or a complete reversal. We see this type of price action before fundamental news releases, major news events, and at the opening of the market. In this recorded webinar we examine volatility both in the forex market and the Wall Street open. For forex, it was the BOC interest rate decision that was responsible for the exaggerated prices moves. It is an invaluable indicator that can not only stop FOMO but also signal it may be time to exit a position.
