Standard Deviation

Discussion in 'Strategy Building' started by fordewind, Mar 13, 2018.

  1. Xela

    Xela


    Sorry - I wandered into the conversation, didn't I? (I realise you were asking Spectre and not me!).

    It's just that whenever I've seen backtesting of different ways of doing things (not only entries and/or targets and/or stop-losses), for intraday trading purposes anyway, an ATR-multiple has always performed much better than an SD - both in my own backtesting (all the way from the days back in history when I was a retail spot forex trader) to the "institutional research" I've seen re automated futures-trading systems. So my impression - though I can't call it more than that - is that for most everyday trading purposes, ATR is probably, in principle, a more reliable approximation of "current volatility" (in its relevant sense, anyway) than SD's are. Apologies for a probably-unhelpful answer. o_O
     
    Last edited: Mar 14, 2018
    #21     Mar 14, 2018
    JackRab, tommcginnis and fordewind like this.
  2. Its all good, i was asking you.

    Thanks for sharing your experience!
     
    #22     Mar 14, 2018
    Xela likes this.
  3. panzerman

    panzerman

    Calculating SD using price is like chasing a feather in the wind. Price time series are non-stationary data. A stationary time series is one whose statistical properties such as mean, variance, autocorrelation, are all constant over time. One common method to check if data is stationary is called an Augmented Dickey-Fuller test.

    Returns are generally more stationary than price, which is why return space is used so often in econometrics.
     
    #23     Mar 14, 2018
    fordewind likes this.
  4. I have written many automated strategies, with and without standard deviation. It doesn't help.
     
    #24     Mar 17, 2018
    lovethetrade and fordewind like this.
  5. Thanks.So far nothing can beat channels in my strategies testing.
     
    #25     Mar 17, 2018
  6. Use log price. Stdev of price makes no sense.
     
    #26     Mar 18, 2018
    fordewind likes this.
  7. What`s log price?
     
    #27     Mar 18, 2018
  8. I use reverse-log price.

    [​IMG]
     
    #28     Mar 18, 2018
  9. @bashatrader , @OddTrader

    How`d you use log price in a strategy?
     
    #29     Mar 18, 2018