The volatility trading strategy is a trading strategy based on identifying volatility in the market and trading financial assets based on that volatility. This strategy relies on the idea that markets do not move in a straight line, but fluctuate between support and resistance levels.
Principles of the volatility trading strategy:
1. Identifying volatility: identifying market volatility by analyzing charts and historical data.
2. Identifying support and resistance levels: identifying support and resistance levels that the market is influenced by.
3. Trading based on volatility: trading financial assets based on volatility in the market.
Types of volatility:
1. Upward volatility: the volatility that occurs when the market moves upward.
2. Downward volatility: the volatility that occurs when the market moves downward.
3. The lateral volatility: the volatility that occurs when the market moves sideways.
Features of the volatility trading strategy:
1. Risk reduction: reducing risks by trading financial assets based on market volatility.
2. Increasing profits: increasing profits by trading financial assets based on market volatility.
3. Performance improvement: improving performance by identifying market volatility and trading financial assets based on it.
Disadvantages of the volatility trading strategy:
1. Error in identifying volatility: errors in identifying volatility in the market can lead to losses.
2. Market fluctuations: market fluctuations can lead to changes in market volatility.
3. Psychological pressure: psychological pressure can lead to trading errors.$TIA
