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I've been trying to figure this out:
"the daily change in the standard deviation of the 10-day avg closing
price"
I plotted a 10-day sma, then tried to overlay the "std dev" indicator
on that, but it ain't working. So I wrote an indicator -
Stdev( (Mov(C, 10, S)),1)
- but that's not doing it either.
So, not being especially intelligent, I'm trying to understand
what "std dev" actually is in the first place. The clearest
explanation from Google, for me, is:
"The standard deviation (s or s) is defined as the positive square
root of the variance. The variance is a measure in squared units and
has little meaning with respect to the data. Thus, the standard
deviation is a measure of variability expressed in the same units as
the data. The standard deviation is very much like a mean or
an "average" of these deviations. ..."
So, for instance, a Bollinger Band at the default of 20 periods and 2
std dev, plots the average variance of price over 20 periods, x2.
Thus, I assume, the theory behind BB's is that when price hits or
exceeds one of the bands, it is at an extreme for the "normal" price
variance, and thus due for a reversal. Am I getting there?
Thanks for any assistance,
Harold
--- In equismetastock@xxxxxxxxxxxxxxx, "hcour" <halcour@xxxx> wrote:
>
> In the Nov Futures mag there is an indicator called the Volatility
> Oscillator which consists of three parts: 1) The daily change in
> closing price, 2) 5-day avg of the daily closing price changes, 3)
the
> daily change in the standard deviation of the 10-day avg closing
price.
>
> I've got the first 2 plotted, no problem. Could someone help w/the
> code for the third part, the std dev? Here is how it's written in
the
> article:
>
> STD[mean(day^1:day^10] ~n
> STD[mean(day^0:day^9)]
>
> Except the ~ symbol is actually over the letter "n".
>
> I never got past Algebra I, so this is beyond moi. I know MS has a
Std
> Dev indicator, but I don't know how to code it.
>
> Thanks for any help,
> Harold
>
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