OPEN-SOURCE SCRIPT
Percentage difference to averages
Simple indicator to analyse the distance of price and average.
An indicator that shows the percentage distance between the current price and a moving average (MA) is a powerful tool to assess how far the price has deviated from its recent average. It provides insights into market extremes, momentum, and potential reversal zones.
Identifying Overbought / Oversold Conditions:
When the price is significantly above the moving average (e.g., +10% or more), it might suggest that the asset is overbought and could be due for a correction or consolidation.
If the price is far below the MA (e.g., –10%), it might indicate oversold conditions and a potential rebound.
Gauging Strength or Weakness:
- A large positive distance shows strong bullish momentum – price is surging away from its average.
- A large negative distance can suggest weakness, panic selling, or capitulation.
This helps traders and analysts see whether current price action is strong or potentially stretched.
Entry/Exit Signal Aid
- Trend followers might enter when the price pulls back toward the MA after a strong run.
- Mean reversion traders use the distance to bet on a return toward the average when the deviation gets too extreme.
An indicator that shows the percentage distance between the current price and a moving average (MA) is a powerful tool to assess how far the price has deviated from its recent average. It provides insights into market extremes, momentum, and potential reversal zones.
Identifying Overbought / Oversold Conditions:
When the price is significantly above the moving average (e.g., +10% or more), it might suggest that the asset is overbought and could be due for a correction or consolidation.
If the price is far below the MA (e.g., –10%), it might indicate oversold conditions and a potential rebound.
Gauging Strength or Weakness:
- A large positive distance shows strong bullish momentum – price is surging away from its average.
- A large negative distance can suggest weakness, panic selling, or capitulation.
This helps traders and analysts see whether current price action is strong or potentially stretched.
Entry/Exit Signal Aid
- Trend followers might enter when the price pulls back toward the MA after a strong run.
- Mean reversion traders use the distance to bet on a return toward the average when the deviation gets too extreme.
Script open-source
Nello spirito di TradingView, l'autore di questo script lo ha reso open source, in modo che i trader possano esaminarne e verificarne la funzionalità. Complimenti all'autore! Sebbene sia possibile utilizzarlo gratuitamente, ricordiamo che la ripubblicazione del codice è soggetta al nostro Regolamento.
Declinazione di responsabilità
Le informazioni e le pubblicazioni non sono intese come, e non costituiscono, consulenza o raccomandazioni finanziarie, di investimento, di trading o di altro tipo fornite o approvate da TradingView. Per ulteriori informazioni, consultare i Termini di utilizzo.
Script open-source
Nello spirito di TradingView, l'autore di questo script lo ha reso open source, in modo che i trader possano esaminarne e verificarne la funzionalità. Complimenti all'autore! Sebbene sia possibile utilizzarlo gratuitamente, ricordiamo che la ripubblicazione del codice è soggetta al nostro Regolamento.
Declinazione di responsabilità
Le informazioni e le pubblicazioni non sono intese come, e non costituiscono, consulenza o raccomandazioni finanziarie, di investimento, di trading o di altro tipo fornite o approvate da TradingView. Per ulteriori informazioni, consultare i Termini di utilizzo.