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Two lines are plotted below the chart as part of the Standard Deviation indicator.
The standard deviation is a popular statistical calculation. It can be plotted beneath the price chart as an indicator. A standard deviation for each bar or candle is calculated over the specified period.
The standard deviation is a measure of the volatility of the price trend.
A rising Standard Deviation indicates an increase in volatility.
A decrease in the Standard Deviation indicates a decrease in volatility.
When the Standard Deviation line is above the Moving Average line, caution should be exercised. Even though a trend is established, volatility is high. On the other hand, a falling standard deviation indicates that a strong trend is in place.
The indicator table value in TradePoint & RZone also provides you with a list of all values of this indicator for any group of stocks. This will allow you to compare the readings of this indicator across different stocks.
This indicator is also available in the System Builder on RZone & TradePoint for all charting methods. Using the system builder, you can develop various strategies based on the different conditions already present in this indicator. Additionally, it can be used with other indicators or price patterns to develop effective trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.
The indicator is applicable to all types of charting. It is calculated based on the number of columns on P&F charts, bricks on Renko charts, lines on Line-break charts, candles on Heikin-Ashi charts, and lines on Kagi charts. While the formula and reading of the indicators remain the same, they become more dynamic on these charts.