1. take the log of the price data (newpriceseries=log(c)), so that the price distribution is better normalized. 2. do everything like you have been told from here except use the new logged series as your price series.
--- In [email protected], "droskill" <[EMAIL PROTECTED]> wrote: > > So would this apply to the price data or the BB? > > --- In [email protected], "jeffro861" <jeffro861@> wrote: > > > > I couldn't help myself... might as well take the natural log of the > > price series you're dealing with-- price data follows more of a log > > distribtion than a normal distribution (log(c)). This become more > > apparent in parabolic moving stocks and longer time frames for > > calculating std. dev. There are other ways to deal with the > > asymetric price distributions, but that is entirely too much > > explanation for this dialogue. > > > > good luck > > > > > > > Hey all - I'm trying to put together an indicator based on Standard > > > Deviation. The difference, from, say Bollinger Bands in this case > > is > > > that I want to show the Std Dev from a moving average in terms of > > 1,2) > > > > > and 3 standard deviations from mean, where mean is an N day moving > > > average. So, the mean would be represented by a constant straight > > > line on a chart, and then a line would go up/down around it. > > > > > > For an example, check this out: > > > http://www.indexindicators.com/charts/sp500-vs-sp500-50d-rsma- > > params-3y-x-x/ > > > > > > I really don't know how to approach this - anybody have any > > > thoughts/ideas? Or maybe someone has done it before (or it's in AB > > > already) and I just haven't found it. > > > > > > Thanks! > > > > > >
