Volatility Compression: The Silent Setup Before Big Moves Volatility compression is when price starts moving in tighter and tighter ranges — creating a wedge or “squeeze” formation. While many traders avoid these periods, smart money watches them like a hawk. In 2025, these are seen as the loading phase for explosive moves. Compression usually forms after a big move or news. Liquidity dries up. Volume shrinks. Traders get bored. But what’s really happening? Institutions are accumulating positions quietly. How to trade it: Watch for price to form higher lows and lower highs on lower timeframes Mark FVGs or OBs just outside the squeeze Wait for liquidity grab followed by CHoCH → Enter with direction Once volatility returns, price rips out of the range, often traveling hundreds of pips. The patient trader rides it. The impulsive one gets stopped out early. Volatility compression isn’t a trap — it’s the fuse. Light it right, and you ride the blast.