OPEN-SOURCE SCRIPT
Descriptive Statistics [Mean + Std Dev Bands]
This indicator models market structure using a parametric statistical approach based on the mean and standard deviation. It is designed to measure price volatility and deviation from average market behavior.
It does not predict direction; instead, it describes how far price deviates from its statistical or arithmetic mean over a defined sample of data.
What it shows?
1. Mean: The average price level, representing the central equilibrium of the dataset.
2. Standard Deviation (σ): Measures how dispersed price is around the mean.
3. ±1σ Bands: Normal market variation zone (typical price movement).
4. ±2σ Bands: Strong deviation zone (extended moves).
5. ±3σ Bands: Extreme statistical events (rare market conditions).
6. You may notice the one of (±1σ Bands) bands deviate more than the other especially during trendy market conditions. It is easy spot can can be good for daily directional bias.
How it works
The indicator collects price data using either:
1. Reset Mode: Builds a new dataset each session (Daily, Weekly, Monthly, or chart timeframe).
2. Length Mode: Uses a rolling window of the last N candles.
It then calculates the mean and standard deviation from the selected dataset to construct dynamic volatility bands.
How to use it
1. Price near the Mean → equilibrium / fair value zone.
2. Price within ±1σ → normal market behavior.
3. Price between ±1σ and ±2σ → strong momentum or expansion.
4. Price beyond ±2σ or ±3σ → statistically extreme conditions (overextension or volatility spikes).
Key concept
This tool does not forecast price direction. It provides a volatility-based distribution model, helping traders understand how stretched or compressed price is relative to its average behavior.
⚠️ Note
This indicator is for educational and analytical purposes only and should not be used as standalone trading advice.
Author: TUGUME WILLIAM MUTARA
It does not predict direction; instead, it describes how far price deviates from its statistical or arithmetic mean over a defined sample of data.
What it shows?
1. Mean: The average price level, representing the central equilibrium of the dataset.
2. Standard Deviation (σ): Measures how dispersed price is around the mean.
3. ±1σ Bands: Normal market variation zone (typical price movement).
4. ±2σ Bands: Strong deviation zone (extended moves).
5. ±3σ Bands: Extreme statistical events (rare market conditions).
6. You may notice the one of (±1σ Bands) bands deviate more than the other especially during trendy market conditions. It is easy spot can can be good for daily directional bias.
How it works
The indicator collects price data using either:
1. Reset Mode: Builds a new dataset each session (Daily, Weekly, Monthly, or chart timeframe).
2. Length Mode: Uses a rolling window of the last N candles.
It then calculates the mean and standard deviation from the selected dataset to construct dynamic volatility bands.
How to use it
1. Price near the Mean → equilibrium / fair value zone.
2. Price within ±1σ → normal market behavior.
3. Price between ±1σ and ±2σ → strong momentum or expansion.
4. Price beyond ±2σ or ±3σ → statistically extreme conditions (overextension or volatility spikes).
Key concept
This tool does not forecast price direction. It provides a volatility-based distribution model, helping traders understand how stretched or compressed price is relative to its average behavior.
⚠️ Note
This indicator is for educational and analytical purposes only and should not be used as standalone trading advice.
Author: TUGUME WILLIAM MUTARA
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.