Getting started in trading financial markets can be overwhelming at first, so we thought we’d put together some pointers in developing a trading strategy. This guide includes understanding volatility and trends, as well a quick explanation on quantifying your trading strategies’ basic testing.Volatility is a measure of the amount an asset’s price changes over a period of time. Assets are financial securities like shares, forex, commodities, etc.
The above daily price chart of Apple has the ATR indicator added to it . The value of the indicator at $6, highlights that the Apple share price is moving on average $6 between the low and high of each day. A simple but dynamic tool traders can add to price charts to help assess trends is a moving average, or MA. A moving average, as the name suggests, is an average of the security’s price data.