Volatility is a tool to determine the pair with the best ratio of volatility to the cost in a given period of time. Knowing the cost of the transaction with a broker we can divide volatility by that cost.

The higher the value , the more profitable to play on particular pair. Example: with our broker transaction cost EUR / USD is 1 (spread + commission). Daily volatility is 95.2 which is the ratio variation / cost out 95.2 / 1 = 95.2. The average daily volatility of the EUR / AUD is 102.6. However, the spread + commission is higher than the EUR / USD, and are 2. Volatility ratio / cost is 102.6 / 2 = 51.3. As can be seen playing on the EUR / USD for the day is almost two times more profitable than the EUR / AUD. I would recommend it to calculate the other pairs available from the broker – it might open a new trading opportunities.