Gioteen-NormThe "Gioteen-Norm" indicator is a versatile and powerful technical analysis tool designed to help traders identify key market conditions such as divergences, overbought/oversold levels, and trend strength. By normalizing price data relative to a moving average and standard deviation, this indicator provides a unique perspective on price behavior, making it easier to spot potential reversals or continuations in the market.
The indicator calculates a normalized value based on the difference between the selected price and its moving average, scaled by the standard deviation over a user-defined period. Additionally, an optional moving average of this normalized value (Green line) can be plotted to smooth the output and enhance signal clarity. This dual-line approach makes it an excellent tool for both short-term and long-term traders.
***Key Features
Divergence Detection: The Gioteen-Norm excels at identifying divergences between price action and the normalized indicator value. For example, if the price makes a higher high while Red line forms a lower high, it may signal a bearish divergence, hinting at a potential reversal.
Overbought/Oversold Conditions: Extreme values of Red line (e.g., significantly above or below zero) can indicate overbought or oversold conditions, helping traders anticipate pullbacks or bounces.
Trend Strength Insight: The normalized output reflects how far the price deviates from its average, providing a measure of momentum and trend strength.
**Customizable Parameters
Traders can adjust the period, moving average type, applied price, and shift to suit their trading style and timeframe.
**How It Works
Label1 (Red Line): Represents the normalized price deviation from a user-selected moving average (SMA, EMA, SMMA, or LWMA) divided by the standard deviation over the specified period. This line highlights the relative position of the price compared to its historical range.
Label2 (Green Line, Optional): A moving average of Label1, which smooths the normalized data to reduce noise and provide clearer signals. This can be toggled on or off via the "Draw MA" option.
**Inputs
Period: Length of the lookback period for normalization (default: 100).
MA Method: Type of moving average for normalization (SMA, EMA, SMMA, LWMA; default: EMA).
Applied Price: Price type used for calculation (Close, Open, High, Low, HL2, HLC3, HLCC4; default: Close).
Shift: Shifts the indicator forward or backward (default: 0).
Draw MA: Toggle the display of the Label2 moving average (default: true).
MA Period: Length of the moving average for Label2 (default: 50).
MA Method (Label2): Type of moving average for Label2 (SMA, EMA, SMMA, LWMA; default: SMA).
**How to Use
Divergence Trading: Look for discrepancies between price action and Label1. A bullish divergence (higher low in Label1 vs. lower low in price) may suggest a buying opportunity, while a bearish divergence could indicate a selling opportunity.
Overbought/Oversold Levels: Monitor extreme Label1 values. For instance, values significantly above +2 or below -2 could indicate overextension, though traders should define thresholds based on the asset and timeframe.
Trend Confirmation: Use Label2 to confirm trend direction. A rising Label2 suggests increasing bullish momentum, while a declining Label2 may indicate bearish pressure.
Combine with Other Tools: Pair Gioteen-Norm with support/resistance levels, RSI, or volume indicators for a more robust trading strategy.
**Notes
The indicator is non-overlay, meaning it plots below the price chart in a separate panel.
Avoid using a Period value of 1, as it may lead to unstable results due to insufficient data for standard deviation calculation.
This tool is best used as part of a broader trading system rather than in isolation.
**Why Use Gioteen-Norm?
The Gioteen-Norm indicator offers a fresh take on price normalization, blending statistical analysis with moving average techniques. Its flexibility and clarity make it suitable for traders of all levels—whether you're scalping on short timeframes or analyzing long-term trends. By publishing this for free, I hope to contribute to the TradingView community and help traders uncover hidden opportunities in the markets.
**Disclaimer
This indicator is provided for educational and informational purposes only. It does not constitute financial advice. Always backtest and validate any strategy before trading with real capital, and use proper risk management.
