Standard Deviation of Price - Why Understanding it is Your Key To Big Profits
Understanding the concept of standard deviation of price is essential if you want to win at forex trading yet very few traders have even heard of it, let alone understand it. If you understand it and its significance you can get a head start on the vast losing majority and enjoy greater forex profits and we will look at standard deviation in more detail in this article.
Standard Deviation Defined
Standard deviation of price is a statistical term that gives an indication of the volatility of price in a market and it can be applied to any investment market - shares, bonds, commodities and of course forex.
Standard deviation simply gives a view of how widely values (closing prices) are dispersed from the average price. Dispersion is defined as the difference between the actual value (closing price) and the average value (mean closing price).
The bigger the difference between the closing prices and the average price, the higher the standard deviation of the market studied will be. (more…)
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