A Standard-Deviation Force Indicator for Measuring Price Distance from an Average
Summary
The indicator measures how far the closing price lies above or below a chosen moving average in standard-deviation steps. Users configure the averaging period and type, plus the first and maximum deviation levels and the increment between levels. Its signed output increases as price crosses additional bands above the average and decreases across bands below it; the plotted line changes color according to whether the reading is rising or falling.
The proposed use is as a higher-timeframe filter: gauge how far price has moved from its mean when assessing lower-timeframe entries. The note provides indicator logic and parameter descriptions, but no performance results or evidence that a particular setting or trading rule is profitable. It also says the measure may have other uses. Readings depend on the selected average, period, standard-deviation calculation, and step size, so the indicator describes relative displacement rather than a standalone entry signal.
Key ideas
- The indicator counts standard-deviation thresholds between price and a selected average.
- Positive readings represent price above the average, while negative readings represent price below it.
- Users can configure the average type, period, deviation range, and step size.
- A suggested application is filtering lower-timeframe entries with higher-timeframe distance-from-mean readings.
- The document supplies no empirical performance evaluation for the indicator.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.