Archive for the ‘loans’ tag
Price Distribution Systems
Price movement is usually viewed as a chart on which each new time period is seen as a new bar or point recorded to the right of the previous prices. There are many applications that need to look at the way prices cluster, or distribute, rather than sequences of patterns. In options, it is important to evaluate the current market volatility to decide the chances of prices remaining in a specific range for a specific amount of time. The standard deviation gives the most basic measure of price distribution. From the value of 1 standard deviation we can estimate the chances of a price remaining within a range over time. The key values to remember are that 1 standard deviation defines 68% of the price movement (both up and down), 2 standard deviations contain 95%. and 3 standard deviations contain 99% of all price movement based on the sample of data used to calculate the standard deviation value.