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ATS Technical Analysis Software

Median Absolute Deviation (Around the Median)

NT 8

​​​Indicator Description:
The median absolute deviation around the median is a measure of dispersion of a set of data points. It can be used in place of the standard deviation when the weight of outliers shall be reduced.

The indicator displays the median absolute deviation around the median, which is often referred to as the “median absolute deviation”.

The median absolute deviation around the median is a much more robust measure of dispersion than the standard deviation. Large outliers will have a far lesser impact on the dispersion, when the mean absolute deviation around the median is used instead of the standard deviation.

The median absolute deviation around the median is always smaller than the standard deviation. When the data is normally distributed the standard deviation is about 1.4826 times the median absolute deviation. The exact factor can be derived from the cumulative distribution function of the standard normal distribution.

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