The standard volatility measure is average true range: how many points the stock moves on an average day, gaps included. Convert it to a percentage of price so you can compare a 20 stock with a 400 stock.

It answers three questions at once. How far must the stop sit to survive normal noise? Is my target even reachable within a day? And how many shares may I buy, given that a volatile name needs a wider stop?

A stop narrower than half the daily range will be hit almost every time — not because you were wrong, but because the stock breathes. A stop wider than about two daily ranges is usually too far for a single day. The useful band sits between them, and size follows from the formula in the foundations track.

Stock selection follows from this too: if a name averages under about 2% a day, most days it lacks the movement to cover spread, commission and error. And if it averages over 8%, it demands a far smaller position than you'd assume.

Volatility isn't constant: it compresses on quiet days and explodes around earnings, rate decisions and macro events. A trader using last month's number on an earnings morning is using a far too narrow stop. Always measure against current conditions.