Deviation in forex refers to the difference between the expected value or average value of a currency pair and the actual value. It is a manual setting used in trading platforms to avoid requotes. Deviation can be either positive or negative, depending on whether the actual value is above or below the expected value. Deviation is an important metric in forex trading because it can help traders identify potential trading opportunities. If the deviation is significant, it can indicate that the market is experiencing a sudden change in direction, which could provide a trading opportunity.

Standard deviation is a term used in statistics to measure the variance of a dataset from its mean value. Essentially, the further a value falls from the mean, the higher the standard deviation. In forex trading, traders use standard deviation to put current price action into context by establishing a periodic closing price’s relation to an average or mean value. Standard deviation can create a range that incorporates a certain percentage of its values, which can give traders a quick, digestible synopsis of how an event is likely to play out using past data the event has produced.

Using deviation and standard deviation in forex trading can help traders make better trading decisions and increase their chances of success. By setting deviation in forex and monitoring it, traders can identify potential trading opportunities. Incorporating deviation analysis into technical analysis can provide valuable insights into market trends and potential price movements, enabling traders to adjust their strategies based on market conditions.