The Standard Deviation Bands are used to determine the trading range of an instrument, and also helpful in verifying whether the instrument follows normal distribution.
If an instrument's price follows normal distribution pattern then 68% of the bars will be enclosed within the upper and lower bands (2 sigma deviation)So, the upper and
lower band are considered the normal trading range. Stop-loss can be set beyond this trading range. This indicator first calculates the standard deviation for the
selected instrument based upon the underlying price field (e.g. Close, High, Low, Median, Typical - configurable) over the specified period (configurable). The upper
band is calculated by multiplying the standard deviation with the multipler and adding it to the current price. Likewise, the lower band is calculated by multiplying
the standard deviation with the multiplier and subtracting it from the current price.
If an instrument's price follows normal distribution pattern then 68% of the bars will be enclosed within the upper and lower bands (2 sigma deviation)So, the upper and
lower band are considered the normal trading range. Stop-loss can be set beyond this trading range. This indicator first calculates the standard deviation for the
selected instrument based upon the underlying price field (e.g. Close, High, Low, Median, Typical - configurable) over the specified period (configurable). The upper
band is calculated by multiplying the standard deviation with the multipler and adding it to the current price. Likewise, the lower band is calculated by multiplying
the standard deviation with the multiplier and subtracting it from the current price.
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