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The Standard deviation indicator is to assess the degree of deviation of market price
The indicators are used by traders in the foreign exchange market, represent a mathematical formula, United by some common idea. Depending on the data that wants to obtain the speculator, formulas are combined, creating a certain system.
The standard deviation as is well known from math lessons and probability theory. Why I remembered what standard deviation? The fact that this principle is used in the indicator Standard deviation, which will be discussed today.
Standard deviation is a standard indicator in the set of MetaTrader 4. Placed it in the category "Trend", and when installed on a graph takes place in the "basement":
Standard deviation allows us to understand how much the market has deviated from the middle line. This is important information that helps to assess the state of the market, its volatility.
In the indicator settings you can set the period as for the middle line. Actually, the Standard deviation calculates the deviation of market price values from the middle line, so that similarity of preferences is not surprising.
Standard deviation is a statistical value that characterizes data scatter relative to the mean value.
As You know, the family of indicators MA (middle line) are the average values, which compares the market price. So, the algorithm of the program in MetaTrader 4 will help us quickly understand the current prices differ from the average.
The vertical scale counts the value from 0 and above. When the line is near the bottom mark, the market price is very close to zero. If the indicator line rises, it means the deviation of market prices from the middle line. In other words, if the indicator line located at the bottom of the window, as shown below, the market is likely to be in the flat state (moving sideways).
I recommend to pay attention to these two indicators:
• Genesis Matrix
When the indicator line tilts upward, it is possible to see at once the market price has deviated greatly from the mean. This phenomenon happens when in the chart is observed the trend movement. With the indicator we understand how much in this period of "rocking" the market and see what it was before.
For example, if we plan to trade only on the active, volatile market, you will need to avoid making deals, while the line Standard deviation is in the lower half of the window. But how to add to the objective assessment of the situation? In the program settings you can set the levels of the indicator window:
This capability will be needed in order to track the behavior of the line and determine for themselves the rules, for example, if the indicator is below a preset level, then the market believe calm, if the above - trend. Accordingly, depending on the position of the line relative to the set level, you can decide how to proceed.
Nothing to search, download and install is not necessary, because the indicator Standard deviation is in every MetaTrader 4 client terminal. The program is simple, convenient, but there is support. With its help, you can't even understand in which direction the trend is, and can only detect the presence or absence. The standard deviation can be a great filter for Your trading system.
|Category: Binary options | Added by: (07.11.2017)