Volatility

Volatility measures how much and how quickly a currency pair's price fluctuates over a given period — higher volatility means larger, faster price swings in either direction. It tends to spike around major economic data releases, central-bank decisions, and geopolitical events, and it varies naturally by pair (major pairs like EUR/USD are typically less volatile than emerging-market or exotic pairs). Volatility isn't inherently good or bad: it creates larger profit potential but also larger risk, which is why position sizing and stop-losses matter more when volatility is high.