Standard Deviation is a way to measure price volatility by relating a price range to its moving average. The higher the indicator’s value, the wider the spread between price and its moving average, the more volatile the instrument, the more dispersed the price bars become.
The lower the indicator’s value, the smaller the spread between price and its moving average, the less volatile the instrument, and the closer the price bars become to each other. Standard Deviation rises as prices become more volatile. As price action calms, standard Deviation heads lower.
Standard Deviation is used as part of other indicators such as Bollinger Bands. It is often used in combination with other technical analysis techniques.
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