Standard Deviation Channel (SDC) Explained | Price Structure

STANDARD DEVIATION CHANNEL
The standard deviation channel (SDC) is a price channel consisting of a centre line and two outer lines, one in each side of the centre line. Thus, a channel. The centre line is formed through linear regression analysis using the least squares method. Those outer lines can be set any number of deviations away from the centre lines, most traders using the SDC would be using between 1-3 deviations. The SDC can then be used for numerous signals, but most famously it is used in tandem with mean reversion so if price closes outside of the channel it suggests that momentum is overcooked and due a retracement or reversal. That being said though it’s not just for reversals, it can be used to help for trend trades and money management too. Whatever you’re using it for, it’s extremely likely that you’re going to need other indicators or trading concepts at play if you’re trying to attain consistent profitability. The SDC alone is a tough challenge.

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STRATEGIES USING SDC
REVERSAL STRATEGUM #644:
PART 1:    • Reversal Strategum #644 D1 Strategy -...  

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