What is the standard deviation indicator on MT4?
Have you recently come across the Standard Deviation Indicator on MT4 and wondered how it could improve your trading experience and give you an edge? Today’s guide will attempt to answer all of your questions about the Standard Deviation Indicator on MT4 and why it is such an excellent tool for every trader.
To start with, the Standard Deviation Indicator is arguably one of the most critical tools you’ll need to achieve hassle-free and financially rewarding trading. This robust tool is specially designed to allow traders to gauge and understand market volatility.
Using it traders can get information such as the current standard price deviation value in relation to Moving Average. This information will allow them to trade the financial market successfully.
Not having access to such information will set you up for a disaster as you’ll be prone to make wrong trading decisions, mainly because it is almost impossible to detect patterns and peculiarities without deploying tools uniquely designed for such purpose.
Before using the Standard Deviation indicator for MT4, always remember that market volatility is directly proportional to the Standard Deviation. This simply means the lower the deviation; the relatively more stable the market will be and otherwise.
To put things simply, when the market is volatile, the prices of the bars are dispersed in relation to the MA (Moving Average). On the flip side, when the market isn’t volatile, the bar prices tend to move towards the moving average.
Standard Deviation indicator on MT4: How does it work?
Like every other indicator available on the MT4 platform, the Standard Deviation Indicator is easy to use. But before deploying this tool for your trading activities, keep in mind that it provides two critical pieces of information to make your trading activities financially rewarding:
An extremely high indicator is a tell-tale sign that market volatility will soon slow down.
If the indicator shows a low value, it is a pointer that there aren't a lot of activities in the market and an indication that the market will soon bounce back.
With access to these trading tips at your fingertips, you have some insight into price movement. This will help you tweak your trading decisions to make the most of every viable opportunity.
Standard Deviation indicator on MT4: Calculations
This robust trading tool comes with some unique calculations you should know. Here, take a look at them:
AMOUNT (j = i – N, i) = SUM ((ApPRICE (j) – MA (ApPRICE (i), N, i)) ^ 2).
StdDev (i) = SQRT (AMOUNT (j = I –N, i) / N).
Where:
Amount (j = I –N, i) = The total sum of squares of numbers from j = i-N to i.
Sqrt = Represents square root.
StdDev (i) = Indicated the current bar’s Standard Deviation.
ApPRICE (j) is the j-th bar’s applied price.
ApPRICE (i) is the current bar’s applied price.
N is the smoothing period.
MA (ApPRICE (i), N, i) the current bar’s moving average for N periods.
Standard Deviation Indicator: How to install
Before you can take advantage of this remarkable trading tool, you’ll need to have it on your chart. This means that you’ll need to download it and install it on the MT4 platform. Here is how anyone can download and install the Standard Deviation Indicator:
- First, download the Standard Deviation Indicator for MT4.
- After you must have downloaded the indicator, proceed to copy the indicator to your Metatrader Directory. In the directory, search for the experts and indicators directory to paste the downloaded file.
- The next thing you need to do is restart your Metatrader 4 app.
- Once the app restarts, you need to specify the testing environment for the indicator. You can do this by selecting Chart and Timeframe.
- From your navigation, search for custom indicators
- Once that opens, simply right click on the StdDev indicator for MT4 and attach it to the chart
- After tweaking the settings, simply hit OK or modify settings.
If you have followed all the steps outlined above, the Standard Deviation should be available on your trading chart.
Note: On the MT4 platform, standard indicators are broadly categorized into four unique categories, and they include Bill Williams, Trend, Oscillators, and Volumes. Since the MT4 Standard Indicator is a trend indicator, please explore the Navigator folder and the Trend folder to find it.
Even though the Standard Deviation Indicator is classified as a trend tool, this robust indicator is among the finest volatility indicator available on the MT4 trading platform. And whether you are a newbie or veteran trader, this tool will help you significantly on your trading journey.
Uninstalling this indicator from your MT4 trading platform is very easy. Here is how to go about it:
- Go to the folder where the indicator is installed
- Right-click on the chart
- Choose indicator list
- Choose MT4 Standard Deviation Indicator
- Click delete.
Why the Standard Deviation Indicator is excellent for traders
Are you thinking about giving this indicator a try but still skeptical? Well, let's take you through some remarkable benefits of this tool.
- This tool allows traders to pinpoint when the price of an asset is stuck within a trading range. This way, you know whether the asset's price is moving or not. To get the most out of this tool, we suggest using it together with Price Action Indicator.
- The Standard Deviation Indicator helps traders identify the movement or stability of an established market trend. Let’s assume for a minute that the Standard Deviation Indicator moves up shortly before the market starts trending; in that case, you’ll need to tweak your trading strategy to take advantage of the move.
Conclusion
For traders who want a tool that allows them to understand volatility in the market easily, you’ll not be wrong to explore the Standard Deviation Indicator on MT4. This tool is excellent for identifying low or high volatility. With access to this information, traders can execute more accurate trades.
Notwithstanding, despite its many benefits, we don’t encourage using only this tool for your trading decisions. For better output, you can use it together with other great indicators available on MT4.
You might be also curious about What is the Quarters Theory Indicator on MT4?. Also have a look at What Is The Better Volume Indicator in MT4?
