Stocks & Commodities V. 35:02 (8–12): Exponential Standard Deviation Bands by Vitali Apirine

Exponential Standard Deviation Bands by Vitali Apirine

Traders hunt for volatility, but how can you find it? Here’s one technique you can apply that’ll help you see volatility while a stock is trending.

Sometimes you see it right in front of your eyes. Other times you may have to look hard to find it. Either way, volatility needs to exist if you want to make successful trades. Lucky for you, there are many ways to measure volatility. One way is the exponential standard deviation bands (ESD bands), which are volatility bands placed above and below an exponential moving average. The bands are based on the exponential standard deviation, which changes as volatility increases and decreases. The bands automatically widen when volatility increases and narrow when volatility decreases. This means they can be used on different securities with standard settings ...