Volatility in Forex: What It Means and How to Trade It Volatility in the forex market refers to the degree of price movement within a currency pair over a given time. High volatility means larger price swings, while low volatility signals more stable and predictable movements. Traders often view volatility as both a risk and an opportunity—it can lead to quick gains or significant losses depending on how it’s handled. Several factors contribute to forex volatility, including economic announcements, geopolitical instability, unexpected central bank decisions, or natural disasters. Currency pairs like GBP/JPY and EUR/NZD are known for being particularly volatile, whereas pairs like EUR/USD tend to be more stable. Traders can use tools such as Average True Range (ATR), Bollinger Bands, or economic calendars to prepare for or take advantage of volatility. Some traders specialize in trading during high-volatility periods, using tight stop losses and short-term strategies. Understanding and respecting volatility is key to managing risk and staying profitable in forex. #CommunityAMA