Community Forex Questions
What are trading deviations?
It is generally understood that "deviation" refers to deviating from the intended meaning. Trading deviations are differences in the psychology of stock traders from the rest. In other words, this is an occupational deformation.
The trading deviation is an important measure of performance and the measure of how closely a trader is able to follow a trading strategy. The standard deviation shows how far traders deviate from the trade strategy and gives an indication of whether the strategy has been followed as per the system specifications. High numbers on this metric indicate that some traders are not following their system as expected. A lower number will show that the traders are very close to their trades as they should be according to the plan.
Trading deviations are the changes in an asset's returns that are not predicted by the asset's price, volatility, or trading volume. This means traders are able to buy shares of an asset at a lower price than they would normally be expected to pay. Similarly, traders can also sell shares of an asset for more than they were previously expecting. These differences can be caused by different market conditions and make trading more unpredictable.
Trading deviations refer to deviations or variances from expected or usual trading patterns. These anomalies can occur in financial markets due to unexpected events, market sentiment shifts, or technological glitches. Traders and analysts closely monitor these deviations to identify potential opportunities or risks. Common examples include abnormal price movements, volume spikes, or sudden changes in market behavior. Understanding and analyzing trading deviations help traders make informed decisions, implement risk management strategies, and stay ahead of market trends. It's a crucial aspect of technical analysis and market surveillance for those engaging in various financial markets.
Oct 11, 2021 14:45