The Volatility Index 75 or VIX is a basic measure of risk associated with financial market instruments. Which is a deliberate constituent of the fluctuations in asset prices and is recorded as a range of price changes (difference between the maximum and minimum prices) in a trading session, trading day, month, etc. Normally a more extensive scope of variations (higher volatility) indicates higher trading risks involved. In this way, volatility is valued as a random value and its mathematical modeling provides the basis for all risk assessment methods used in the Foreign Exchange market. Read more about it http://www.volatility75.net/.
For the determination of volatility an analytical standard deviation is estimated. It also contains the financial investment disclosure. In intraday trading the most notable sign of volatility is the periodic common price range; in more extended position evaluations, weekly, monthly, or yearly limit averages may be applied. The most common annual volatility in long-term financial investment analysis. Historical volatility equals the standard deviation of an asset’s value over some time, calculated from its historical price. Expected volatility is calculated from current prices on the assumption that the market price of an asset reflects the expected risk. Volatility is recognized by traders as one of the most powerful informational indicators for determinations about opening or closing currency situations. This can be judged by the following financial indicators: Bollinger Bands, Commodity Channel Index, Average True Range. Everything is integrated with the popular trading platform.
An additional important index is the RVI (Relative Volatility Index). It reflects the direction in which price volatility changes. The main characteristic of RVI is that it confirms the signals of Forex oscillators (RSI, MADD, Stochastik, and others) without duplicating them. Since the Relative Volatility Index is determined by market data dynamics, which are not covered by other indices, it can serve as an excellent verification tool. This is the RVI, used as a filter for independent indicators, which can determine trend strength, measure volatility instead of price, and brings the missing element of authentication to the trading system.