Free Forex MQL Training

Standard Deviation indicator calculates the deviation of the price of a bar/candle from the average price of certain number of bars. For example the standard deviation of the close of the last bar from the average price of its past 20 bars is the Standard Deviation of the past bar. Traders usually use a simple moving average for the average price calculations. Price by default refers to the close price of each bar. For the current bar close is similar to the Bid price. This indicator behaves very similar to Bollinger Bands Width as both consider  standard deviation. We use these indicators to have a sense of the volatility of market. Another alternative tool to evaluate the volatility is ATR or Average True Range.

Discuss this term!