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Volatility and your Broker

Volatility is a very important variable in our markets, traders love it, we don’t really control when it comes and goes, market does, this said…how does your broker play a role in it?

Well it will sounds very simple, but a broker needs to give its clients and traders very important tools such as 
• Access
• Reliable
• Liquidity
• Transparency
• Settlement

Reality is that all of the above require a lot of commitment, resources, integrity and products. Tradeview has managed to encapsule all of the above in a very simple streamlined process for clients. From Access to the best spreads in the industry, to reliable software, colocation services, not to mention liquidity of over 50+ Liquidity Providers with transparent pricing and credit lines that ensure settlement of trades.

Volatility (in Forex trading) refers to the amount of uncertainty or risk involved with the size of changes in a currency exchange rate. A higher volatility means that an exchange rate can potentially be spread out over a larger range of values. High volatility means that the price of the currency can change dramatically over a short time period in either direction.

On the other hand, a lower volatility would mean that an exchange rate does not fluctuate dramatically, but changes in value at a steady pace over a period of time.Commonly, the higher the volatility, the riskier the trading of the currency pair is.
Access, Reliable and Liquidity are crucial for a client in volatile markets, Tradeview has its own servers, liquidity providers and software that provide clients best bid an offer at all given times.

Technically, the term “Volatility” most frequently refers to the standard deviation of the change in value of a financial instrument over a specific time period. It is often used to quantify (describe in numbers) the risk of the currency pair over that time period.

Volatility is typically expressed in yearly terms, and it may either be an absolute number ($0.3000) or a fraction of the initial value (8.2%).

In general, volatility refers to the degree of unpredictable change over time of a certain currency pair exchange rate. It reflects the degree of risk faced by someone with exposure to that currency pair.

Forex Volatility for Market Players

Volatility is often viewed as a negative in that it represents uncertainty and risk. However, higher volatility usually makes Forex trading more attractive to the market players. The possibility for profiting in volatile markets is a major consideration for day traders, and is in contrast to the long term investors’ view of buy and hold. Tradeview structure allows clients to properly trade in volatile markets with the proper tools, access and spreads.

Volatility does not imply direction. It just describes the level of fluctuations (moves) of an exchange rate. A currency pair that is more volatile is likely to increase or decrease in value more than one that is less volatile.

Elections in the US are around the corner and there are plenty variables that could trigger volatile markets, therefore, make sure you have a conversation with your broker and associate yourself with the right one.

TRY Tradeview!!

Chava Palma
SVP Sales

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