STANDARD DEVIATION ON NIFTY

A normal distribution is a very important statistical data distribution pattern occurring in many natural phenomena, such as height, blood pressure, lengths of objects produced by machines, etc. Certain data, when graphed as a histogram (data on the horizontal axis, amount of data on the vertical axis), creates a bell-shaped curve known as a normal curve, or normal distribution.

Normal distributions are symmetrical with a single central peak at the mean (average) of the data. The shape of the curve is described as bell-shaped with the graph falling off evenly on either side of the mean. Fifty percent of the distribution lies to the left of the mean and fifty percent lies to the right of the mean.

The spread of a normal distribution is controlled by the standard deviation,The smaller the standard deviation the more concentrated the data.

The mean and the median are the same in a normal distribution.
If you add percentages, you will see that approximately:
• 68% of the distribution lies within one standard deviation of the mean.
• 95% of the distribution lies within two standard deviations of the mean.
• 99.7% of the distribution lies within three standard deviations of the mean.
These percentages are known as the "empirical rule".

Now on Nifty watch earlier moves when breakout has happened. The price is between second deviation and third deviation. Also the move happens along the second deviation. Currently we are above the first deviation suggesting positive move(68% bulls).Targets as per second deviation is 5220 and third deviation shows 5325 currently. Lets watch how it develops on Nifty.

Happy Trading!