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What is it?
Standard Deviation measures how much an asset’s price deviates from its average, indicating volatility. It’s a statistical tool to understand price consistency. How is it used?
  • Volatility: High standard deviation means high volatility; low means stability.
  • Bollinger Bands: It’s a key component of Bollinger Bands.
  • Mean reversion: Extreme deviations from the mean often revert.
How is it calculated? StdDev = √[(Σ(Price - SMA)²) / n]   Where n is the period, and SMA is the mean price over that period. The above content is designed for informational purposes only, and is explicitly not investment advice. Algo Pilot is a US based technology company and not a bank, broker-dealer, or RIA. As such, Algo Pilot LLC does not provide investment advice and is not a member, SIPC. Brokerage services offered by 3rd parties are not directly affiliated with Algo Pilot LLC, and Algo Pilot users may choose the broker relationship that they desire.
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