Standard Deviation (indicator)

सरल शब्दों में विचार

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.

गणना कैसे होती है

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)

इसका उपयोग कैसे करें

• 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.

निष्कर्ष निकालना

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

इन बातों का ध्यान रखें

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

थोड़ा इतिहास

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