What is the Standard Deviation indicator?

December 27, 2022 | monetaeditor

The Standard Deviation indicator is a technical analysis tool that measures the volatility of a financial instrument, such as a stock or currency pair. It is a statistical measure that shows how much the individual data points in a sample differ from the mean or average of the sample. The Standard Deviation indicator is commonly used to identify overbought and oversold conditions in the markets, as well as to measure the strength of a trend and the potential for a trend reversal.

How is it used by traders?

Traders typically use the Standard Deviation indicator to identify overbought and oversold conditions in the markets. The indicator is displayed as a curve on the price chart and consists of an upper and lower band, which are typically set at two standard deviations above and below the mean or average price. When the price of the financial instrument moves outside of the upper or lower band, it may be considered overbought or oversold. Traders can also use the Standard Deviation indicator to confirm the strength of a trend or to identify potential trend reversals. For example, a rising Standard Deviation may indicate that a uptrend is gaining strength, while a falling Standard Deviation may suggest that the trend is losing momentum.

How can I add Standard Deviation to a chart in MT4 or MT5?

To add the Standard Deviation indicator to a chart in MetaTrader 4 (MT4) or MetaTrader 5 (MT5), follow these steps:

Open the chart for the currency pair, stock, or other instrument that you want to analyze.

Click on the ”Insert” menu at the top of the chart and select ”Indicators” from the drop-down list.

In the ”Indicators” window, scroll down until you find the ”Standard Deviation” and then double-click on it to add it to the chart.

The Standard Deviation indicator will appear on the chart as a curve on the main price chart.

You can customize the appearance of the Standard Deviation by right-clicking on it and selecting ”Properties” from the context menu. This will open the ”Standard Deviation” properties window, where you can change the color, line style, and other settings for the indicator.

Once you have customized the Standard Deviation to your liking, click ”OK” to apply the changes and close the properties window. The updated Standard Deviation will be displayed on the chart.

Risk Warning:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Trading derivatives is risky. It isn't suitable for everyone; you could lose substantially more than your initial investment. You don't own or have rights to the underlying assets. Past performance is no indication of future performance and tax laws are subject to change. The information on this website is general in nature and doesn't consider your personal objectives, financial circumstances, or needs. Please read our legal documents and ensure that you fully understand the risks before you make any trading decisions.
Regional Restrictions:
The information on this site is not intended for residents of Canada, Cyprus, France, Spain, Russia, Ukraine, Turkey, Brazil, Malaysia, Indonesia, Italy, the United States, or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Legal Information:
Moneta Markets is a trading name of Moneta Markets (Pty) Ltd, an authorised Financial Service Provider (“FSP”) registered and regulated by the Financial Sector Conduct Authority (“FSCA”) of South Africa under license number 47490 and located at 1 Hood Avenue, Rosebank, Johannesburg, Gauteng 2196, South Africa. Company Registration Number: 2016 / 063801 / 07. Contact Phone Number: +27 (10) 1429139. Operational Office: Unit 7, 31 First Avenue East, Parktown North, Gauteng, Johannesburg, 2193, South Africa.

Mmonexia Ltd, facilitates payment services to the licensed and regulated entities within the Moneta Markets Organizational structure.

Mmonexia Ltd registered in the Republic of Cyprus with registration number HE436544 and registered address at Archbishop Makarios III, 160, Floor 1, 3026, Limassol, Cyprus. Mmonexia Ltd, facilitates payment services to the licensed and regulated entities within the Moneta Markets Organizational structure.

Moneta Markets Limited. Business Registration Number:72493069. Registration Address: Flat/RM A 12/F ZJ 300, 300 Lockhart Road, Wan Chai, Hong Kong. Contact Phone Number: +852 37522556. Operational Office: Unit 1201, 12/F, FWD Financial Centre, 308 Des Voeux Road Central, Sheung Wan, Hong Kong.
Legal Information:
Moneta Markets is a trading name of Moneta Markets (Pty) Ltd, an authorised Financial Service Provider (“FSP”) registered and regulated by the Financial Sector Conduct Authority (“FSCA”) of South Africa under license number 47490 and located at 1 Hood Avenue, Rosebank, Johannesburg, Gauteng 2196, South Africa. Company Registration Number: 2016 / 063801 / 07. Contact Phone Number: +27 (10) 1429139. Operational Office: 31 First Avenue East, Parktown North, Gauteng, Johannesburg, 2193, South Africa.

Moneta Markets is a trading name of Moneta Markets Ltd, registered under Saint Lucia Registry of International Business Companies with registration number 2023-00068.

Mmonexia Ltd, facilitates payment services to the licensed and regulated entities within the Moneta Markets Organizational structure.

Moneta Markets PTY LTD soliciting Business from UAE through a Non-Exclusive Introducing Broker Agreement Regulated by SCA , Sterling Financial Services LLC ,Cat 5 ,No 305029