A breakout can occur when a specific price level is breached such as support and resistance levels, pivot points, Fibonacci levels etc. With breakout trades, the goal is to enter the market right when the price makes a breakout and then continue to ride the trade until volatility stay alive. If there is large price movement within a short amount of time then volatility would be considered high. On the other hand, if there is relatively little movement in a short period of time then volatility would be considered low.
How to Measure Volatility:
Volatility measures the overall price fluctuations over a certain period of time and this information can be used to detect potential breakouts. There are a few indicators that can help you gauge a pair’s current volatility.
#1 Moving Average:
Moving averages are probably the most common i…