Standard Deviation (SD) gets a bad rep because of people like Taleb and etc. But I’m starting to think SD makes a huge amount of sense when it comes to stop placement. Usually when you place a stop, you want to put it away from the “noise”, so you only get hit if the price does something that is usual and it goes quite a bit against you.
So lets say you are trading Crude Oil and you have a bullish bias. You can put a stop at the extreme of 2 SDs away from the current price (and the SD is…