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Stock Selection (based upon their historical volatility)

Volatility -:It is a measure of how far the current price of a stock moves from its average past prices. Greater the movement, greater is the volatility.The high volatile stocks moves fast whereas low volatile stocks trades in a narrow range.

Historical Volatility Ratio (HVR)-: HVR represents the strength of current volatility as compare to long term volatility. The ratio represents the average volatility of a stock. If this ratio is above 1, the current volatility is high. Therefore large price movement is likely.

Now the key question is how to find a high volatile stocks?

First, we will have to find stocks with current high volatility. It may happen that the some stocks have un-usual high volatility. We can use HVR to eliminate those stocks.
We are comparing Volatility and HVR because volatility shows current position whereas HVR shows the average historical volatility.

We will first select top 20 high volatile stocks.
Then we will select 10 stocks out of those 20 stocks based upon their high HVR.

These stocks can use for intraday,  positional trade both.
For an intraday trade look for the patterns like ORB; Consolidation.
For positional trade, go with the trend.

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