# Rookie finance question: standard deviation

#### andybandy123

##### New Member
Hi
Im kinda new to statistics and would very much appreciate some help.

I have finally understood the standard deviation formula and the reason behind every step/calculation. But..lets talk about stock market.

a) why does the stock market write s.dev in percentage? I had the impression that the normal way is to express s.dev with numbers, but with stocks its seems like they Always write percent? Why?

B) i can calculate the s.dev on a stock.
BUT i have a problem....lets say we gonna fins the s.dev for a stock for the last Three Days...we use the closing price each day. The first day the closing price is 10, then the second day its 12, and last day its 15.
Everything fine and I know how to do it.

But the problem is that this formula Only takes Into account the closing price..

I want to know how big the fluctuation has been each day. I want to be able to see:
Okey the closing price day 1 was 10...But the highest price during that day was 14 and the lowest was 6. So the daily course had a movement of +4 and -4 from the closing price (which was 10).

And day 2 the closing price (as i wrote) is 12...But highest point is 20 and lowest 7.
Etc..

I want to be able to answer the question:
Okey so If i invest in this stock day 4..what can i expect the Range of movement to be during the day?

And i dont get how i should calculate when the normal formula Only look at one variable each day (closikg price). I want to use two (high and low).

And...please explain as you would do to a newbie Thanks!!

#### Misato

##### New Member
Definitely a great aspect to consider when trading. I use standard deviation in most of my trend reversal setups. I actually learned a lot of training techniques by studying lately due to the enormous amount of time that we have with the furloughs. I was also interesting lately into investing my gains from trading Forex with a reputable financial advisor. On wealthtender.com I found lots of great information to guide me in choosing a great person to trust my money with. Since last year my assets have given me a 7% profit which is amazing considering the hard situation of the markets.

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#### joeb33050

##### Member
I have no yet been able to forecast stock prices perfectly, but I do know that the daily high and low of a stock price is the price range; and the standard deviation and range are related. Know one and n and you know the other. I have a paper on this, just ask.
And, put your money in the bank until you get it all sorted out.
joe b. Kelley's Ice Cream, 1954

#### noetsi

##### No cake for spunky
I am skeptical that anyone can predict stock prices perfectly. If they could given the incredible amount of money that could be gained they would have done this already - and wouldn't talk about it since then others would do so as well. I think the general agreement is that stocks are essentially white noise and no one can predict them.