The Mean Absolute Deviation Around the Median is a measure of dispersion of a set of data points. It can be used in place of the Median Absolute Deviation (Around the Median) as it returns a smoother curve.

### Indicator Description

The Mean Absolute Deviation Around the Median is a measure of dispersion of a set of data points. It is used in place of the Median Absolute Deviation (Around the Median) as it returns a smoother curve.

Calculation: Median Absolute Deviation (Around the Median) of the selected data set is the arithmetic mean of the absolute deviations from the median of the data set.

The Mean Absolute Deviation is calculated from price data over the selected lookback period.

- Calculation of a central tendency, such as the mean, median or mode, of the selected input data.
- Establish the data points deviation from the central tendency and calculate the absolute differences dropping any negative signs.
- We take the absolute values of the differences and calculate the arithmetic mean.

The indicator which can be downloaded here is the mean absolute deviation around the median. The indicator establishes the absolute differences where the standard deviation is calculating the squares of the differences. Using the median will minimize the mean absolute deviation, whereas the mean minimize the standard deviation.

When the mean absolute deviation around the median is used in place of the standard deviation, large outliers will have less impact on data dispersion. In short, the mean absolute deviation around the median is always smaller than the standard deviation. With a normal data distribution the standard deviation is about 1.2533 times the mean absolute deviation. The exact factor is obtained as the square root of π/2.

#### Other Library indicators

Other indicators from the statistical analysis category include the Current Day Median, Mean Absolute Deviation (Around the Mean), Median Absolute Deviation (Around the Median), Interquartile Range, Moving Mean TPO, Moving Median TPO, Moving Mode TPO, Moving Mean VWTPO, Moving Median VWTPO, Moving Mode VWTPO, Moving Median, Standard Deviation, Volume Weighted Standard Deviation, Volume Weighted Mean Absolute Deviation and the Modified Z Score. You may furthermore review the Raff Channel, Daily Regression Channel and Indicator Spotlight newsletter post on the Linear Regression Channel.

The Mean Absolute Deviation Around the Median is available for NinjaTrader 8.