Moving
Standard Deviation (MSTD)
The moving standard deviation is a measure of
market volatility. It makes no predictions of market direction, but it may
serve as a confirming indicator. You specify the number of periods to use, and
the study computes the standard deviation of prices from the moving average of
the prices.
Parameters:
 Period (20)  the number of bars,
or interval, used to calculate the study.
Computation
 Calculate the moving average. The formula
is:
 Pn the price you pay for the nth
interval
 n the number of periods you select
 Subtract the moving average from each of
the individual data points used in the moving average calculation. This
gives you a list of deviations from the average. Square each deviation and
add them all together. Divide this sum by the number of periods you
selected.
 Take the square root of d. This gives you
the standard deviation.
There is risk of loss in futures
trading. Past results are not indicative of future results.
