Volatility tools: Bollinger Bands and ATR

Volatility is how much the price swings. A calm market moves in small steps. A volatile one jumps around. Crypto is often very volatile, so measuring it helps you set sensible stops and position sizes.

Bollinger Bands are three lines drawn around the price. The middle line is usually a 20-period SMA. The upper and lower bands sit 2 standard deviations above and below it. Standard deviation is a statistic that measures how spread out recent prices are around their average.