— how wide your results swing around their average. Two strategies can post the same average return; the one that zigzags more is the more volatile.
Volatility isn't your enemy on its own — it's the price of the ticket. The catch: for the same , the higher it runs, the deeper your drawdowns, and the more nerve you need not to quit at the worst moment.
A price lurching before kickoff, a token up 20% then giving it back, a stock shaking on an earnings call: same phenomenon, three arenas. Volatility describes the path, not the destination.
Takeaway. You don't remove volatility, you size for it: positions small enough that the swings never knock you out of the game. That's where matters as much as edge — see variance and in the glossary. Read next: measuring risk-adjusted return with the Sharpe ratio.
Definition drawn from the Yoseri glossary. Educational outlet — nothing here is investment advice.
The Lexicon · Glossary
Find this term and its reference definition in the full Yoseri glossary.