It stretches pure increments of price change so that their relative travel can be measured. The greater the distance over time, the more volatile the market. But pure volatility has little value for traders if they can't base price prediction upon it. Fortunately volatility has a characteristic that contributes to profitable trading. It tends to move in cyclical patterns.
Markets expand and contract endlessly.
As prices ebb and flow, volatility moves cyclically between active and inactive states. Many tools now focus on the relationship between price swings over time and their current movement. Others predict the future through the pattern of wide and narrow range price bars. As ranges contract, so does volatility. Like a coiled snake, markets approach neutral triggers from which sharp price movements erupt.