Standard deviation holds a special mention in forex trading. To know how this applies to forex trading will require you to visualize data points as closing prices, where the mean indicates the average for the period you want to evaluate it. Traders invariably apply standard deviation to ascertain the risk or volatility associated with currency pairs. Forex pairs with massive volatility undergo high price fluctuations, translating to a higher standard deviation. On the other hand, forex pairs with lower price changes will lead to a lower standard deviation.