A Volatility-Normalized Price Deviation Strategy Using a Signed Potential Score

Summary

The document introduces a strategy that turns price distance from a moving average into a volatility-normalized score. It calculates a rolling standard deviation and a z-score over a configurable lookback, then squares the displacement and applies a directional sign, scaling the result with a configurable force parameter. A threshold controls how extreme the deviation must become before a signal is considered. The script also allows calculations on a selected timeframe and includes an optional regular US market-session filter.

The supplied excerpt ends during the entry-condition description, so the full trade rules, exit logic, and risk controls cannot be confirmed. It provides parameter defaults and implementation details, including handling zero volatility and higher-timeframe data gaps, but no backtest settings, performance evidence, or discussion of costs. The oscillator’s harmonic-physics framing is an analogy for a transformed price deviation; the excerpt does not establish that it has predictive value or demonstrate that threshold signals are profitable.

Key ideas

• The strategy measures price deviation from a rolling average in units of rolling standard deviation.
• It squares the normalized deviation, preserves its sign, and scales it with a configurable force parameter.
• A threshold determines how extreme the score must be to trigger a potential entry.
• The script supports higher-timeframe inputs and an optional regular US trading-session filter.
• The excerpt omits complete entry and exit rules and provides no backtest results.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.