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# Forex Glossary

### The Industry's Most Important Terms Explained

The forex industry is made up of countless definitions and it's easy to forget a few along the way. But because no forex education can be complete without a glossary of forex terms, we've compiled one which aims at explaining key definitions in the simplest way possible. This way, you'll never be lost or confused again!

## Standard Deviation

It is a statistical term denoted by the Greek letter (sigma). It is calculated by the following steps:

• Calculate the mean for a population of n prices (i.e. close)
• Subtract each price from the mean and then square the result
• Sum all squared differences and then divide by the population n
• Take the square root of the above

Or

• Square root of the sum of the squared difference from each closing price to the mean and then dividing by the population (i.e. number of prices).

Standard Deviation formula:

• 68% of the values (prices) will fall within the range of 1 standard deviation of the mean
• 95% of the values (prices) will fall within the range of 2 standard deviations of the mean
• 99.7% of the values (prices) will fall within the range of 3 standard deviations of the mean

Category: Technical Analysis