Standard Deviation

Standard deviation is a measure of volatility relative to the average price.

A low standard deviation indicates that all of the prices are very close to the average price, while high standard deviation indicates that the price changes within a large range of values.

Standard deviation is calculated by summing the squares of the deviations of each period from the average price, dividing by the number of periods, and then taking the square root.

The formula is:
<math>\operatorname{StdDev} = \sqrt\dfrac{{\sum_{i=1}^N}({Close_{i} - Avg})^2}{N}</math>

where:

<math>\operatorname{N}</math> is the number of periods used for the calculation;

<math>\operatorname{Close_i}</math> is the Close price of a period;

<math>\operatorname{Avg}</math> is the average price calculated by the formula:

<math>\operatorname{Avg} = \dfrac{{\sum_{i=1}^N}{Close_{i}}}{N}</math>