Many traders are performing market and stock analysis by disregarding the volatility which is considered as one of the most important parameters along with volume and price change in evaluation of the market and stock's sentiment. It is more than hundreds years ago many professional market analysts pointed to the importance of the volatility analysis. Simple fact that higher volatility is usually recorded during the market recessions, market crashes and corrections down can already make the volatility as a trend predicting indicator.
By putting in simple words the volatility show the average price change degree over pacified period of time. One of the simplest indicators that measure this parameter would be ATR (Average True Range) - it is available with most of the stock chart providers.
As was already mentioned above, the volatility helps to identify the bearish markets when it is applied to the market indexes and bearish stocks when applied to the stocks and ETFs (Exchange Traded Funds). You may say that there are many technical indicators that do it and that would be correct, however, none of the other technical analysis tools describes the price behavior and helps to recognize the periods of different price behavior. Yes, you may use other technical studies, build complex systems, however without volatility factor most of the systems will run into periods when trading signals starts to be generated whether too late or too early.
Stock market is in the constant change and it is never the same. We may have periods when a sock/index price moves slowly and steady and trend changes are prolonged in time. At the same time we may run into periods of choppy side-way moves. We may witness strong runs up and strong declines. We could have sudden and sharp changes in price trends. All of these various periods in price behavior cold be recognized via volatility analysis. Even if you do not use volatility indicators as a main trading decision making tool it would be logical to adjust your indicators to these different price behavior periods.
It could be clearly seen on a simple example of moving averages: you would prefer to have bigger lag (bigger bar period setting) on your moving averages during the quiet steady markets when price trend's changes are prolonged in time. On the other hand, you may prefer to have smaller bar period setting (smaller lag) on your moving averages when you are attempting to cache sharp and strong price trend's changes. In another situation, during the side-way action you could be willing to have higher bar period settings on your moving averages to avoid choppy trading. As you see, trading could be substantially improved and trading risk could be reduced if one would be able to recognize periods in price behavior. The volatility analysis helps to do it.
There are number of technical indicators and studies that already carry the volatility factor in its formulas (calculations) and practice shows that these indicators have better performance wen they are compared to other traditional indicators. Examples of such indicators could be Volatility adjusted MACD, Force index, Bollinger Bands, True Strength Index, Ultimate oscillator, Relative Volatility Index and etc.
In summary: It is highly recommended to monitor price volatility of the market and stocks or ETFs you trade. It may give you a great advantage in reducing the number of lost signals, reduce trading risk and improve your trading performance. It is not easy - if it would be easy then everyone would be a winner. However, if you master it it could deliver great benefits to your portfolio.