Volatility Is A Trader’s Best Friend: Trade Crypto, Forex, Indices, And Commodities On PrimeXBT

Volatility is associated with risk, hence why the CBOE S&P 500 Volatility Index is often referred to as the fear index. Although risk is the worst enemy of an investor, since volatility is inherently associated with downside in markets, volatility is a trader’s best friend.

Here is everything you need to know about the importance of volatility and how to take advantage of the historical volatility all across global markets like crypto, forex, indices, and commodities using PrimeXBT.

What Is Volatility?

According to Merriam-Webster’s dictionary definition of volatility, volatility means to change “quickly and unpredictably.” Even the example they use references the stock market. In more technical terms, it is the measure of the price dispersion of an asset within a given timeframe.

Measuring volatility can focus on the past (historical volatility) or look ahead to the future expectation of price movements in markets (implied volatility). Either way, both measures are tools traders can use to analyze the market and exploit it for potential profit.

The more volatile an asset is, the larger the price movements and the more rapidly they occur and in greater frequency. Risk and reward are exponentially higher in assets with extreme volatility. Lately, however, nearly all assets – even typically stable assets like currencies – have been exceptionally volatile.

About Recent Market Volatility

The forex currency market has the most trading volume and liquidity out of any other market on the planet. Combined with central bank policies, this usually keeps forex currency trading pairs relatively stable. In the current macro environment, the yen and pound both fell more than 50% against the dollar in a matter of months.

Elsewhere in markets, across stocks and commodities, volatility is everywhere. The world’s most important stock indices representing major segments of the economy have plummeted to bear market levels. Once hot commodities have since cooled off and have also been caught in the chaos.

Cryptocurrencies are the most volatile asset class of all, given their speculative nature, and have seen severe selloffs of anywhere between 70 and 90%. Due to all the volatility in crypto, there is an extreme risk of a further drop. But there is also the risk of missing out on the incredible reward now that asset prices are so low once again.

How To Make Volatility Your Best Friend

When volatility strikes, investors panic and mash the sell button. Fear drives decision-making, and mistakes are easily made. The only place there is safety is in cash. On the other hand, traders know how to turn once-in-a-lifetime volatility into an opportunity to profit.

The PrimeXBT margin trading platform offers long and short positions using leverage to amplify profit potential by trading in both directions of the market with the most powerful tools around. Traders can hedge spot positions against additional downside risk while flipping back and forth between long and short to make money from each bear market rally.

Risk management and technical analysis tools are also included to help limit the possibility of loss and improve the chances of success. Additionally, the platform provides access to passive investing tools such as yield accounts and the Covesting copy trading module.

Make The Most Out Of Unprecedented Market Volatility With PrimeXBT

Volatility gets a bad reputation, but it doesn’t deserve it. Without volatility, there would be very few price movements, and the upside in markets would be as few and far between as the downside. All there would be is a whole lot of sideways and boredom.

Make volatility your best friend with innovative PrimeXBT margin trading tools. The platform was recently awarded the Most Trusted Crypto-Asset Trading Platform by Crypto Expo Dubai. Try PrimeXBT today and profit from unprecedented global market volatility.