← Volatility & statistics
Standard deviation volatility
Tracks how the standard deviation of price itself changes over time — a volatility-of-volatility style reading.
What the numbers mean
period varies
The lookback sets the window over which standard deviation is tracked through time — this plots how volatility itself is changing, rather than the level of it.
- Period — the window over which standard deviation itself is tracked
- Second-order: it measures how volatility is changing, not how large it is
How it is used
Used to identify volatility compression and expansion cycles, on the well-documented tendency of quiet periods to precede violent ones.
- Identifying compression and expansion cycles
- Anticipating that quiet periods tend to precede violent ones
How it relates to everything else
This is the numeric version of what a Bollinger squeeze shows visually. Both rest on the same well-documented tendency of volatility to cluster — quiet begets quiet until it does not.
- The numeric form of a Bollinger squeeze
- Second-order measures are noisy by nature
- Signals movement is coming, never which way
What to watch for
Second-order measures are noisy, and the signal is direction-blind: a compression breaking out says movement is coming, not which way.