Standard deviation is a measurement of variation within a set of data points relative to the dataset’s mean average. A higher standard deviation indicates greater variability, while a lower standard deviation suggests less variability from the mean. To understand standard deviation as it applies to trading, you can think of the data points as closing prices and the average mean as representative of the average price for the period you’re analyzing. For traders, standard deviation is frequently used to assess the volatility or risk associated with an asset. A stock with high volatility has a wider range of price ... (full story)