Trend indicators
Standard Deviation (indicator)
Measures how widely prices have been spreading around their average: a simple volatility gauge.
L’idée en termes simples
If closes stay close to their average, the market is calm; if they scatter far from it, the market is volatile. Standard deviation puts one number on that scatter, in the same units as the price.
Mode de calcul
For each of the last N closes, take its distance from the moving average, square it, average those squares and take the square root.
SD = √( Σ (close − MA)² ÷ N ) (default N = 20)Comment l’utiliser
- Rising SD: volatility is increasing (often in breakouts or sell-offs).
- Very low SD: unusually quiet, often before a big move.
- Size positions and stops: wider stops when SD is high.
Tirer des conclusions
- SD is not directional: a sharp rally and a sharp fall both raise it.
Exemple
EURUSD's 20-day SD falls to its lowest level of the year; two days later a central bank surprise sends it up threefold.
Les prix des exemples sont donnés à titre d’illustration.
Points de vigilance
- One huge candle can lift SD for the whole period afterwards.
Un peu d’histoire
The term was introduced by the statistician Karl Pearson in 1894; it is also the engine behind Bollinger Bands.
Contenu éducatif uniquement. Aucun indicateur ni aucune figure ne prédit l’avenir, et rien ici ne constitue un conseil en investissement.