OPEN-SOURCE SCRIPT
Z-Score
Description:
The Z-Score indicator is a powerful tool for assessing the relative position of a financial instrument's current price compared to its historical price data. It calculates the Z-Score, which is a statistical measure of how many standard deviations an asset's current price is away from its historical mean. This can help traders identify overbought and oversold conditions in the market.
Input Parameters:
Length: This parameter sets the look-back period for calculating the mean and standard deviation. It is set to 20 by default but can be adjusted according to your trading preferences.
How it works:
The indicator first calculates the mean (average) and standard deviation of the selected price source (default: closing prices) over the specified length.
The Z-Score is then computed by measuring how many standard deviations the current price is away from the mean. This value is plotted on the chart, providing insight into the current price's relative position.
Usage:
Overbought: When the Z-Score rises above the upper threshold (e.g., +2 standard deviations, shown in red), it suggests that the asset's price is significantly above its historical average, indicating a potential overbought condition. Traders might consider this as a signal to be cautious about entering long positions or to look for potential short opportunities.
Oversold: Conversely, when the Z-Score falls below the lower threshold (e.g., -2 standard deviations, shown in green), it suggests that the asset's price is significantly below its historical average, indicating a potential oversold condition. Traders might consider this as a signal to be cautious about entering short positions or to look for potential long opportunities.
The Z-Score indicator can be a valuable addition to your technical analysis toolkit, helping you make informed trading decisions based on statistical price deviations.
Please make sure to conduct thorough backtesting and combine this indicator with other analysis techniques before making any trading decisions.
The Z-Score indicator is a powerful tool for assessing the relative position of a financial instrument's current price compared to its historical price data. It calculates the Z-Score, which is a statistical measure of how many standard deviations an asset's current price is away from its historical mean. This can help traders identify overbought and oversold conditions in the market.
Input Parameters:
Length: This parameter sets the look-back period for calculating the mean and standard deviation. It is set to 20 by default but can be adjusted according to your trading preferences.
How it works:
The indicator first calculates the mean (average) and standard deviation of the selected price source (default: closing prices) over the specified length.
The Z-Score is then computed by measuring how many standard deviations the current price is away from the mean. This value is plotted on the chart, providing insight into the current price's relative position.
Usage:
Overbought: When the Z-Score rises above the upper threshold (e.g., +2 standard deviations, shown in red), it suggests that the asset's price is significantly above its historical average, indicating a potential overbought condition. Traders might consider this as a signal to be cautious about entering long positions or to look for potential short opportunities.
Oversold: Conversely, when the Z-Score falls below the lower threshold (e.g., -2 standard deviations, shown in green), it suggests that the asset's price is significantly below its historical average, indicating a potential oversold condition. Traders might consider this as a signal to be cautious about entering short positions or to look for potential long opportunities.
The Z-Score indicator can be a valuable addition to your technical analysis toolkit, helping you make informed trading decisions based on statistical price deviations.
Please make sure to conduct thorough backtesting and combine this indicator with other analysis techniques before making any trading decisions.
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オープンソーススクリプト
TradingViewの精神に則り、このスクリプトの作者はコードをオープンソースとして公開してくれました。トレーダーが内容を確認・検証できるようにという配慮です。作者に拍手を送りましょう！無料で利用できますが、コードの再公開はハウスルールに従う必要があります。
免責事項
この情報および投稿は、TradingViewが提供または推奨する金融、投資、トレード、その他のアドバイスや推奨を意図するものではなく、それらを構成するものでもありません。詳細は利用規約をご覧ください。