Standard deviation

Written on Feb 09, 2011 // Uncategorized.

Today is the first day that the standard deviation (68% chance of expiring within a specified range) fell within my breakevens! Look at the lighter blue rectangle between the two red lines on the profit/loss graph. That area, which represents a 68% probability, is now right in the center of my P/L graph, BETWEEN the breakevens. That is a good sign! The standard deviation area will only decrease in size (narrower in width) as we get closer to expiration.

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