Quiet week
What does a week with a narrow trading range actually tell a trader, and what does it leave unknown?
In plain words
A quiet week is one where the price stayed within a small band between its high and low. Quiet describes the size of the moves, not their direction, and not what happens next.
Why it matters
Quiet weeks carry lower costs for stops sized on recent volatility and can reward carry strategies. But a small range says nothing about direction, and volatility clustering means calm periods have often been followed by further calm, so quiet tells a trader about the recent past, not the size of the next move.
In a real week: ETH, week of 31 July 2023
In the ETH week of 31 July 2023, price ranged 3.64% between a low of 1813.80 on Tuesday and a high of 1879.74 on Wednesday, with realised volatility of 22.4% a year and volume at 0.63 times the prior 12-week average. The week still closed -1.69%, and the largest 1-hour move was -1.27%.
A common mistake
Reading a narrow range as a balanced or directionless market. It only says the price moved little; the weekly return and close location can still lean clearly to one side.