Definition
#Measures the absolute high-to-low price spread relative to the open price for the active rolling window.
Formula & calculation
#((Maximum High - Minimum Low) / Open Price) × 100Units & range
%. In quiet sessions on liquid markets: 0.1–0.3%. Elevated sessions: 0.5–1.5%. Extreme events: 2%+.
Interpretation
#A 0.5% return on a 0.6% range is a near-perfect directional move. A 0.5% return on a 3% range is a lot of chop resolving nowhere. Volatility by itself is not a signal: it tells you the context for interpreting current window return and trend cleanliness.
Practical usage
#Use as a scaling denominator rather than a standalone filter. When combining with current window return, higher volatility means the same return is less impressive. When screening for clean breakouts, require a meaningful current window return relative to the volatility of that window, not an absolute return threshold that ignores regime.
Common mistakes
#Frequent interpretation traps and misuse patterns to avoid when applying this metric.
- Using a single current-window-return threshold across instruments with very different volatility profiles. What counts as a strong move on ETH is not the same as on a mid-cap altcoin.
- Treating high volatility as automatically poor-quality. High range with clean direction (high trend cleanliness) is often the best signal environment.
Timeframe note
#This metric applies to rolling windows such as 5m, 15m, and 60m. The underlying definition stays the same; what changes is the time horizon used to measure it. Shorter windows react faster, while longer windows smooth noise and emphasize broader structure.
5m
Faster response to fresh changes in activity and short-horizon structure.
15m
Balanced view between responsiveness and persistence.
60m
Broader context that is slower but more stable.