Bitcoin and Volatility

Bitcoin and Forex Volatility

Can volatility be seen as a type of pattern on a chart, evidencing a range of motion, or can it be seen as a pattern evidenced by irregular movement. This is a core question at the heart of volatility and trading it. If volatility is a range of movement then it may be seen as a desirable quality. If it is irregular than it may be seen as not a desirable property.

Friday close in the Forex markets can be seen as time of irregular volatility, which is not typically tradable. But from this irregular volatility or at least in the run up to it, clear structured movement can occur. Thus this irregular movement can be seen as a a place which at least from proximity to it, traadable movement can occur.

However Bitcoin is an example of both irregular motion and space. As it has moved from its irregular burst upwards, it has found movement within reducing lows. Here an overall reduction in volatility can be seen as a space within which movement can be generated. But this really is volatility, as it is unknown whether this will be the case, until after the event.

Structured movement around or near volatility can be seen as non-volatile movement which can co-exist with the potential for expected volatility, that is the market gives it regularity and allows trends to happen. Thus we can define volatility in terms of expectation that the event will occur. The more volatility there is, the less expectation, whether this is from irregularity in movement or from unknowns in what movement will happen.

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