Forex is a market that trades short-term instruments (usually less than one year) which is a means of investing and raising public funds. The money market is often called the primary liquidity market. Because the traded funds are not carried out in a certain place, this market can also be called an abstract market.
In the forex, because of high liquidity, price fluctuations and volatility are usually higher than other financial asset markets. What exactly is volatility? What is forex volatility? And how will it affect the market if price volatility increases or decreases? On http://www.volatility75.net/ you will take a deeper look at Volatility 75.
Volatility is the amount of distance between the fluctuation/ups and downs of stock or foreign exchange prices. High volatility means that the price goes up high quickly and then suddenly drops very quickly, giving rise to a very large difference between the lowest price and the highest price at a time. In the Forex, the highest price volatility is usually in the GBP / USD pair, EUR / JPY, GBP / JPY, or sometimes EUR / USD. However, the size of the volatility can also change; there are hours when volatility is increasing, and there are hours when volatility slows down. Volatility can be expressed in a specified number of pips (eg 200 pips a day), or an absolute number ($ 0.3000), or the percentage change in the forex price at the beginning of the period (example: 8.2% in a year).
This volatility reflects the amount of risk that exists when we trade on a currency pair. The higher the volatility, the more profit a trader can reap. On the other hand, lower volatility, for example during an Asian market session, means that exchange rates do not fluctuate much and changes tend to be small over time. Therefore, market volatility or volatility has a role in return on investment. In accordance with the adage “High Risk, High Return”, if the volatility is high, the risk increases, but the number of trading opportunities will also increase.
