A Forex volatility indicator can assist a trader in examining the state of a currency pair and determining if it is appropriate for their needs. If they enjoy a calm, serene trip, a currency combination with low volatility may be the ideal choice for them. If they trade in a short-term or counter-trending strategy, they may purposefully seek out more volatile markets. Forex volatility indicators have further applications aside from determining market viability, such as:
Determining if the market is poised to turn around.
Determining the strength of a trend.
Recognizing potential breakouts from a range-bound market.