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
Skrypt open-source
W zgodzie z duchem TradingView twórca tego skryptu udostępnił go jako open-source, aby użytkownicy mogli przejrzeć i zweryfikować jego działanie. Ukłony dla autora. Korzystanie jest bezpłatne, jednak ponowna publikacja kodu podlega naszym Zasadom serwisu.
Wyłączenie odpowiedzialności
Informacje i publikacje nie stanowią i nie powinny być traktowane jako porady finansowe, inwestycyjne, tradingowe ani jakiekolwiek inne rekomendacje dostarczane lub zatwierdzone przez TradingView. Więcej informacji znajduje się w Warunkach użytkowania.
Skrypt open-source
W zgodzie z duchem TradingView twórca tego skryptu udostępnił go jako open-source, aby użytkownicy mogli przejrzeć i zweryfikować jego działanie. Ukłony dla autora. Korzystanie jest bezpłatne, jednak ponowna publikacja kodu podlega naszym Zasadom serwisu.
Wyłączenie odpowiedzialności
Informacje i publikacje nie stanowią i nie powinny być traktowane jako porady finansowe, inwestycyjne, tradingowe ani jakiekolwiek inne rekomendacje dostarczane lub zatwierdzone przez TradingView. Więcej informacji znajduje się w Warunkach użytkowania.