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Learn Algorithmic Trading
book

Learn Algorithmic Trading

by Sebastien Donadio, Sourav Ghosh
November 2019
Beginner content levelBeginner
394 pages
10h 31m
English
Packt Publishing
Content preview from Learn Algorithmic Trading

Standard deviation

Standard deviation, which will be referred to as STDEV, is a basic measure of price volatility that is used in combination with a lot of other technical analysis indicators to improve them. We'll explore that in greater detail in this section.

Standard deviation is a standard measure that is computed by measuring the squared deviation of individual prices from the mean price, and then finding the average of all those squared deviation values. This value is known as variance, and the standard deviation is obtained by taking the square root of the variance. Larger STDEVs are a mark of more volatile markets or larger expected price moves, so trading strategies need to factor that increased volatility into risk estimates and ...

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Publisher Resources

ISBN: 9781789348347Supplemental Content