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What do i mean by stdev?
I run an historical analysis to find out the stdev of the CHANGES in the spot price. Whenever the stdev falls outside 2 stdev, I will hit the trade.
For the bollinger band, whenever it falls outside the bands, i will trade.
My question is, is there a difference(i think there is) and what is the difference?
Which method is better? and why?
One method shows the stdev of the changes in spotprice, while the other shows the stdev of the spotprice itself.
Fundamentally, which one is better to use to trade?
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