Coloring a Standard Deviation Histogram by Its Direction

Summary

This indicator presents a configurable period’s standard deviation of closing prices as a histogram. Each bar is colored according to whether the calculated deviation is higher or lower than its value on the previous bar. The example uses a default lookback of 20 periods, which can be changed by the user. It is an adaptation for ProRealTime of an indicator published on TradingView.

The display offers a simple visual way to distinguish rising from falling measured dispersion. It does not describe a trading signal, specify how to choose a lookback, or explain how to interpret flat readings. No backtest, market example, or performance evidence is given, so the histogram alone does not establish that changes in deviation forecast returns or identify useful entry and exit points. Its role is descriptive: it tracks a measure of price variability and marks its recent direction.

Key ideas

• The indicator plots closing-price standard deviation as a histogram.
• Bar color changes according to whether deviation rose or fell from the previous value.
• The lookback period is configurable and defaults to 20 periods.
• The document provides no trading rules or performance evidence.

Tags

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