Anyone know about Standard Deviations?

[zz]

Does anyone know how to apply standard deviations to get support and resistance #'s for stocks and/or futures? And what the SIMPLE formula is? I know they mean something like theres a 66% chance of this number holding on 1 S.D. and a 97% chance on 2 S.D. etc... Any help or insight would be greatly appreciated.

 

[Dustin]

zz what software are you using? If you have qcharts I may be able to help you.

 

[vitajex]

This site has a basic introduction to the concept
of a normal distribution.

http://www.ruf.rice.edu/~lane/hyperstat/normal_distribution.html

This site has a "z table" calculator, where you enter the
number of deviations from the mean, and it gives you the area
(percentage) under the curve.

http://davidmlane.com/hyperstat/z_table.html

As far as support and resistance goes, you might want
to try Bollinger bands. Many traders use them, including
quite a few on this board. A standard setting of 20,2 for
BB would have a basis line that is the 20 period simple
moving average. The outer lines would be +/- 2 standard
deviations from this line. More info about BB here:

http://www.equis.com/free/taaz/bollinger.html

-v