Standard deviation is the most common but other methods include beta, maximum drawdowns, and the CBOE Volatility Index. Take the time to find out what works best for you and your trading style.

GitHub is where people build software. More than 150 million people use GitHub to discover, fork, and contribute to over 420 million projects.

The Bottom Line The term three sigma points to three standard deviations. Shewhart set three standard deviation (3-sigma) limits as a rational and economic guide to minimum economic loss.