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 de código aberto
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Script de código aberto
Em verdadeiro espírito do TradingView, o criador deste script o tornou de código aberto, para que os traders possam revisar e verificar sua funcionalidade. Parabéns ao autor! Embora você possa usá-lo gratuitamente, lembre-se de que a republicação do código está sujeita às nossas Regras da Casa.
Aviso legal
As informações e publicações não se destinam a ser, e não constituem, conselhos ou recomendações financeiras, de investimento, comerciais ou de outro tipo fornecidos ou endossados pela TradingView. Leia mais nos Termos de Uso.