Standard Deviation (indicator)

הרעיון במילים פשוטות

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.

איך זה מחושב

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)

איך משתמשים בזה

• 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.

הסקת מסקנות

• SD is not directional: a sharp rally and a sharp fall both raise it.

ממה להיזהר

• One huge candle can lift SD for the whole period afterwards.

קצת היסטוריה

The term was introduced by the statistician Karl Pearson in 1894; it is also the engine behind Bollinger Bands.