The degree of price movement over a given period. Higher volatility means larger price swings, which can be both opportunity and risk. ATR (Average True Range) measures volatility — a 14-period ATR of
The degree of price movement over a given period. Higher volatility means larger price swings, which can be both opportunity and risk. ATR (Average True Range) measures volatility — a 14-period ATR of 80 pips on EUR/USD means average daily range is 80 pips. Prop traders should adjust position size based on volatility: higher ATR = wider stops = smaller lots to maintain the same dollar risk.