OPEN-SOURCE SCRIPT
Multi-Sigma Bands [fmb]
Multi-Sigma Bands [fmb] plots standard deviation (sigma) bands around a selectable basis (SMA, EMA, RMA, or Linear Regression). It’s designed to help you spot when price is behaving “normally” versus when it’s stretching into statistically extended territory.
What it shows
- Basis: the central reference line (your chosen basis type)
- ±1σ zone: the common range where price spends much of its time
- ±2σ zone: extended range where moves often become more emotional or trend-driven
- ±3σ zone: extreme range where price is statistically stretched (risk increases)
How to read it
- Inside ±1σ
- Often normal behaviour and mean-reverting price action around the basis.
- Between ±1σ and ±2σ
- A meaningful extension. In trends, price can “walk” these areas for longer than expected.
- Between ±2σ and ±3σ
- Rare extension. Can signal exhaustion, blow-off behaviour, or capitulation depending on direction and context.
How traders typically use it
- Trend context
- In strong uptrends, price may ride the upper bands (+1σ to +2σ) repeatedly.
- In strong downtrends, the lower bands (-1σ to -2σ) can act the same way.
- Bands show statistical stretch, not automatic reversal signals.
- Extension and risk framing
- The farther price is from the basis, the more “stretched” it is.
- That usually means chasing becomes riskier and entries require tighter confirmation.
- Range behaviour
- Ranges often oscillate around the basis, with frequent returns toward the middle zone.
Settings
- Source: what price series to use (Close by default)
- Length: lookback used for both basis and standard deviation
- Basis: SMA, EMA, RMA, or LinReg
- Stdev smoothing: optional smoothing on standard deviation for cleaner bands
- σ multipliers: customise σ1, σ2, σ3 (defaults: 1, 2, 3)
- Force Monthly Data (optional): calculate bands using a higher-timeframe source to reduce noise and focus on macro structure
Disclaimer
This indicator is for informational and educational purposes only and is not financial advice. Always use risk management and confirm with market structure and trend context.
What it shows
- Basis: the central reference line (your chosen basis type)
- ±1σ zone: the common range where price spends much of its time
- ±2σ zone: extended range where moves often become more emotional or trend-driven
- ±3σ zone: extreme range where price is statistically stretched (risk increases)
How to read it
- Inside ±1σ
- Often normal behaviour and mean-reverting price action around the basis.
- Between ±1σ and ±2σ
- A meaningful extension. In trends, price can “walk” these areas for longer than expected.
- Between ±2σ and ±3σ
- Rare extension. Can signal exhaustion, blow-off behaviour, or capitulation depending on direction and context.
How traders typically use it
- Trend context
- In strong uptrends, price may ride the upper bands (+1σ to +2σ) repeatedly.
- In strong downtrends, the lower bands (-1σ to -2σ) can act the same way.
- Bands show statistical stretch, not automatic reversal signals.
- Extension and risk framing
- The farther price is from the basis, the more “stretched” it is.
- That usually means chasing becomes riskier and entries require tighter confirmation.
- Range behaviour
- Ranges often oscillate around the basis, with frequent returns toward the middle zone.
Settings
- Source: what price series to use (Close by default)
- Length: lookback used for both basis and standard deviation
- Basis: SMA, EMA, RMA, or LinReg
- Stdev smoothing: optional smoothing on standard deviation for cleaner bands
- σ multipliers: customise σ1, σ2, σ3 (defaults: 1, 2, 3)
- Force Monthly Data (optional): calculate bands using a higher-timeframe source to reduce noise and focus on macro structure
Disclaimer
This indicator is for informational and educational purposes only and is not financial advice. Always use risk management and confirm with market structure and trend context.
Script de código aberto
Em verdadeiro espírito do TradingView, o criador deste script o tornou de código aberto, para que os traders possam revisar e verificar sua funcionalidade. Parabéns ao autor! Embora você possa usá-lo gratuitamente, lembre-se de que a republicação do código está sujeita às nossas Regras da Casa.
Aviso legal
As informações e publicações não se destinam a ser, e não constituem, conselhos ou recomendações financeiras, de investimento, comerciais ou de outro tipo fornecidos ou endossados pela TradingView. Leia mais nos Termos de Uso.
Script de código aberto
Em verdadeiro espírito do TradingView, o criador deste script o tornou de código aberto, para que os traders possam revisar e verificar sua funcionalidade. Parabéns ao autor! Embora você possa usá-lo gratuitamente, lembre-se de que a republicação do código está sujeita às nossas Regras da Casa.
Aviso legal
As informações e publicações não se destinam a ser, e não constituem, conselhos ou recomendações financeiras, de investimento, comerciais ou de outro tipo fornecidos ou endossados pela TradingView. Leia mais nos Termos de Uso.