A Technical Approach To Trend Analysis: Practical Trade Timing for Enhanced Profits
by Michael C. Thomsett
Volatility Indicator
A statistical test of volatility attempts to quantify volatility by comparing the latest closing price to the average closing price, based on standard deviation. This is influenced by the number of days selected in the test.
This indicator is calculated by finding standard deviation and dividing it by the average closing price for the same number of periods, as in the following:
V = (σ cpn) ÷ (cp ÷ n)
When: V = volatility
σ = standard deviation
cp = closing prices
n = number of periods
This calculation may be performed against ‘n’ periods of a number of days or over several years. It produces a version of volatility based on one standard deviation; in comparison Bollinger Bands accomplishes the same comparison basis ...
Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
and much more.
Read now
Unlock full access