DEFINITION of 'Volatility Ratio'
A technical indicator used to identify price ranges and breakouts. The volatility ratio uses a true price range to determine a stock's true trading range and is able to identify situations where the price has moved out of this true range.
Next Up
BREAKING DOWN 'Volatility Ratio'
The volatility ratio is typically signified with a primary line on a chart, apart from price bars. Although there is no hardandfast number used to determine when a breakout is probable, a volatility of 0.5 is most often used by technical traders.
RELATED TERMS

Average True Range  ATR
A measure of volatility introduced by Welles Wilder in his book: ... 
Range
A stock's low and high prices for a particular trading period, ... 
Breakout
A price movement through an identified level of support or resistance, ... 
Demarker Indicator
An indicator used in technical analysis that compares the most ... 
Breakout Trader
A type of trader who uses technical analysis to find potential ... 
Ratio Analysis
A ratio analysis is a quantitative analysis of information contained ...
Related Articles

Trading
Range Bar Charts: A Different View Of The Markets
While range bars are not a type of technical indicator, traders can employ this useful tool to identify trends and interpret volatility. 
Markets
Like Ranges? These Are Stocks to Consider
Whether you want to trade the price fluctuations within a range, or await a breakout, here are four stocks for you. 
Markets
Watch These Stocks Closely For a Breakout
Here are three stocks to watch for breakouts right now. 
Markets
Expect Breakouts in These Stocks Soon
Watch these stocks this week for a breakout. There are long and short candidates, based on different chart patterns. 
Markets
Sizing A Futures Trade Using Average True Range
Futures trading is risky business, so it's crucial that traders' positions match the level of risk they are willing to bear. 
Trading
Watch These 3 Stocks for Breakouts (SAP, ORI)
These three stocks are close to shortterm pattern breakout levels. 
Trading
Range Trade Forex With NonU.S. Dollar Pairs
If you are following a rangetrading strategy, you're better off with pairs that do not include the U.S. dollar. Find out why. 
Trading
The Debt To Equity Ratio
The debt to equity ratio identifies companies that are highly leveraged and therefore a higher risk for investors. Find out how this ratio is calculated and how you can use it to evaluate a stock. 
Trading
Stocks at Major Resistance  Breakout or Reverse?
These are four stocks that both short and longerterm traders will want to keep an eye on. 
Trading
The Most Volatile Stocks With Volume For ShortTerm Traders
Looking for big daily moves with volume that makes it easy to get in and out. Here are four of the most consistently volatile stocks, with significant volume.
RELATED FAQS

What is the Volatility Ratio formula and how is it calculated?
Understand what the volatility ratio indicator is, how it is calculated and the way this technical indicator is used by traders ... Read Answer >> 
How do I use Volatility Ratio for creating a forex trading strategy?
Read about how technical analysts might use Jack Schwager's volatility ratio within the context of a larger foreign exchange ... Read Answer >> 
Which market indicators reflect volatility in the stock market?
Learn the most commonly used technical indicators of stock market volatility that are watched by stock market traders and ... Read Answer >> 
What is a common strategy traders implement when using the Volatility Ratio?
Learn how to create a strategy using the volatility ratio with uptick volume and downtick volume to signal reversal of trend ... Read Answer >> 
What are the top technical indicators used for RangeBound Trading strategies?
Learn how to identify when a market is range bound and what some of the technical indicators are that work best for trading ... Read Answer >> 
What is the Ultimate Oscillator formula and how is it calculated?
Learn how to calculate momentum with the Ultimate Oscillator using the formula created by technical analyst Larry Williams ... Read Answer >>