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Dunn To PerfectionFoundation

Risk Management · Module 3: Drawdowns & Volatility · Lesson 3

Volatility

Beginner 6 minLesson 11 of 15

Learning objectives

  • Explain volatility in plain language
  • Understand why it matters to markets
  • Recognise a common misconception

The concept

Price variability; higher means wider typical swings.

Why it matters

should adapt to volatility.

How markets interpret it

ATR-based stops scale with volatility.

Key takeaways

  • Reduce size when volatility rises.

Knowledge check

When volatility rises, keeping risk constant means…

Key terms · hover or tap for a definition

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