Standardized Median Proximity [AlgoAlpha]

🔍 Key Features:
1. 📈 Median Tracking: At the core of this indicator is the calculation of the median price over a specified lookback period. By evaluating the current price against this median, the indicator provides a sense of whether the price is trending above or below its recent median value.
2. 🌡️ Normalization of Price Deviation: The deviation of the price from the median is normalized using standard deviation, ensuring that the indicator's readings are consistent and comparable across different time frames and instruments.
3. 📌 Boundary Calculations: The indicator sets upper and lower boundaries based on the normalized values, helping to identify overbought and oversold conditions.
4. 🎨 Visual Appeal and Clarity: With carefully chosen colors, the plots provide an intuitive and clear representation of market states. Rising trends are indicated in a shade of green, while falling trends are shown in red.
5. 🚨 Alert Conditions: Stay ahead of market movements with customizable alerts for trend shifts and impulse signals, enabling timely decisions.
🔧 How to Use:
- 🎯 Set your preferred lookback lengths and standard deviation multipliers to tailor the indicator to your trading style.
- 💹 Utilize the boundary plots to understand potential overbought or oversold conditions.
- 📈 Analyze the color-coded column plots for quick insights into the market's direction relative to the median.
- ⏰ Set alerts to notify you of significant trend changes or conditions that match your trading criteria.
Basic Logic Explained:
- The indicator first calculates the median of the selected price source over your chosen lookback period. This median serves as a baseline for measuring price deviation.
- It then standardizes this deviation by dividing it by the standard deviation of the price deviation over a 45-period lookback, creating a normalized value.
- Upper and lower boundaries are computed using the exponential moving average (EMA) and standard deviation of these normalized values, adjusted by your selected multiplier.
- Finally, color-coded plots provide a visual representation of these calculations, offering at-a-glance insights into market conditions.
Remember, while this tool offers valuable insights, it's crucial to use it as part of a comprehensive trading strategy, complemented by other analysis and indicators. Happy trading!
🚀
Added inputs to customize oversold and overbought bands
Script open-source
In pieno spirito TradingView, il creatore di questo script lo ha reso open-source, in modo che i trader possano esaminarlo e verificarne la funzionalità. Complimenti all'autore! Sebbene sia possibile utilizzarlo gratuitamente, ricorda che la ripubblicazione del codice è soggetta al nostro Regolamento.
Per un accesso rapido a un grafico, aggiungi questo script ai tuoi preferiti: per saperne di più clicca qui.
Code: ALPH4
🚨Get premium: algoalpha.io
🛜Get FREE signals: discord.gg/xCmqTVRexz
❓Do you have feedback or indicator ideas? Join our server to tell us about it!
Declinazione di responsabilità
Script open-source
In pieno spirito TradingView, il creatore di questo script lo ha reso open-source, in modo che i trader possano esaminarlo e verificarne la funzionalità. Complimenti all'autore! Sebbene sia possibile utilizzarlo gratuitamente, ricorda che la ripubblicazione del codice è soggetta al nostro Regolamento.
Per un accesso rapido a un grafico, aggiungi questo script ai tuoi preferiti: per saperne di più clicca qui.
Code: ALPH4
🚨Get premium: algoalpha.io
🛜Get FREE signals: discord.gg/xCmqTVRexz
❓Do you have feedback or indicator ideas? Join our server to tell us about it!