This script shows a plotshape on candles, respective of deviation % from the chosen moving average. The further price is from the MA, theoretically, the faster and more reliably price should return to that moving average or close to it.
Users have the following inputs:
- Type of MA to measure the deviations from, i.e EMA, SMA, WMA, VWMA. - Accompanying moving averages for reference. Fast, med, slowest - Offset [rarely warranted] - AVP [average Percent Volatility] resolution - AVP length - Use without AVP or other filter - Use with AVP filter - Hide/Show High Deviations [7% to 12%] - Hide/Show Medium-High Deviations [3% to 6%] - Hide/how Smallest High Deviations [0.5% to 3%] - Hide/Show Smallest Low Deviations [-0.5% to -3%] - Hide/Show Medium-Low Deviations [-3% to -7%] - Hide/Show Low Deviations [-7% to -12%] - Optional size adjustment for low % deviations, used for lower time frames
There are individual plotshapes from deviation percentages in brackets between percentages in both directions of the moving average. i.e 1%-2%, 2%-3%, etc, up to 20% whereby there is a plotshape for all deviations about 20% above the MA and one plotshape for all deviations below -20% below the MA The plotshapes are color coded from pink [high deviations to sell] and blue [low deviations to buy]. The style menu is setup to show the deviations as they would appear at their respective height above or below the MA. The current filter [AVE] is a calculation of the average difference between all bars over the length input.
Depending on what time frame you trade within, it may be suggested that these signals are more likely to assist with long exits than short entries, but I have used it for both successfully under certain time frames. Checking off the "Trading Below 3m" box changes the size of the smaller deviations from auto to tiny, which are more visible.
I'll be adding and testing different filters applied to reduce deviation signals that are heavily against the trend or discounting larger time frame momentum. This script, especially the filters I have and will continue to add are experimental. Please use at your own risk.
Thanks for your time!
Please PM me for access.
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Added a standard deviation filters broken down by Highs, Lows, >20% and lower than -20%. Default settings are designed for 1H timeframe and would need to be altered for lower timeframes.