Hey traders! Today, we're diving into an essential indicator for our trading toolkit: variance. If you're using MetaTrader 4, you might have heard of Welford’s method for calculating variance, which you can check out here.
Welford’s method is known for its single-pass calculation approach, which is pretty neat. It streamlines the process by avoiding unnecessary loops after the initial values are set, making it a great option when speed is of the essence in your trading strategy.
Now, here’s a little heads-up: if you compare this approach to the traditional Welford’s method, you might notice a slight difference. This variance method skips the sample correction that Welford’s includes. While that difference is typically minor, it can matter if you're working with values that vary widely. If your data points stray far from standard sample values, sticking with Welford’s method is probably your best bet.
To give you a clearer picture, check out the images below that illustrate this method in action:
Remember, understanding how to use variance effectively can enhance your trading strategy, so make sure to keep it in your arsenal!
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