):This function is available on the Add Study window and in the Formula Toolbox.
Standard Deviation is a statistical measure indicating the variability of the data points. High standard deviations are believed by some analysts to indicate market tops, while the opposite is true for lower Standard Deviations. Calculating the Standard Deviation involves taking the square root of the deviations from a simple moving average.
The following formula describes the Standard Deviation
():
Sum the square of the difference of each PRICE (x) for the PERIOD (n), and the Simple Moving Average value (m).
Divide the sum by the PERIOD (n).
Calculate the square root of the above result.
Note: Bollinger divides the sum by n, whereas many other references use n – 1.
Example: STDDEV(@,8)
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Parameter |
Description |
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Display |
Opens a sub-window with display properties: •Color = Select a line color. •Weight = Type a value for line thickness. •Display = Select line style: line, histogram, or dash. •ShareScale = Assign a behavior for functions and studies sharing the vertical scale: •Auto = System determine whether sharing is feasible. •On = Scale is shared regardless of the functions and studies displayed. •Off = Scale is not shared. |
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MarkIt |
Opens the Specify Conditions for Marking Bar window. |
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Period |
Time period for the moving average calculations. |
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Price |
Price used for calculation. |
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OB/OS |
Opens a sub-window with properties for overbought and oversold indicators. •Color = Select a line color. •Weight = Type a value for line thickness. •Type = Select fixed or dynamic. •Std Dev = Choose a multiplier of the Standard Deviation used to derive high and low. •Lookback = Choose the number of bars that should be compared to the current bar. •Level = Assign a percentage value of average OB/OS to be used to calculate predictor OB/OS levels. •Display = Click this check box to display the line on the chart. •Style = Choose a line style: line, long dash, or short dash. |
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Divisor |
N = standard deviation calculation N-1 = population standard deviation calculation. |