Normal Distribution Asymmetry & Volatility Zones Indicator provides insights into the skewness of a price distribution and identifies potential volatility zones in the market. The indicator calculates the skewness coefficient, indicating the asymmetry of the price distribution, and combines it with a measure of volatility to define buy and sell zones.
The key features of this indicator include:
Skewness Calculation: It calculates the skewness coefficient, a statistical measure that reveals whether the price distribution is skewed to the left (negative skewness) or right (positive skewness).
Volatility Zones: Based on the skewness and a user-defined volatility threshold, the indicator identifies buy and sell zones where potential price movements may occur. Buy zones are marked when skewness is negative and prices are below a volatility threshold. Sell zones are marked when skewness is positive and prices are above the threshold.
Signal Source Selection: Traders can select the source of price data for analysis, allowing flexibility in their trading strategy.
Customizable Parameters: Users can adjust the length of the distribution, the volatility threshold, and other parameters to tailor the indicator to their specific trading preferences and market conditions.
Visual Signals: Buy and sell zones are visually displayed on the chart, making it easy to identify potential trade opportunities.
Background Color: The indicator changes the background color of the chart to highlight significant zones, providing a clear visual cue for traders.
By combining skewness analysis and volatility thresholds, this indicator offers traders a unique perspective on potential market movements, helping them make informed trading decisions. Please note that trading involves risks, and this indicator should be used in conjunction with other analysis and risk management techniques.
Sürüm Notları
⋅
Modified the maximum value for the length to 500
Sürüm Notları
⋅
Adjusted the maximum value of "Distribution Length" and implemented some minor code modifications.
Sürüm Notları
⋅
Updated the color scheme to enhance the indicator's intuitiveness.
Sürüm Notları
⋅
Code refactor
Added tooltips for input variables
Sürüm Notları
⋅
Added an option to switch between raw and normalized skewness values through the 'Plot normalized' setting, offering users more flexibility in market analysis.
Enhanced the skewness calculation by incorporating the normalization process, which compares the current skewness value to a moving average of recent skewness values.
Introduced normalization length parameter allowing users to define the period for normalization, optimizing signal accuracy based on individual trading strategies.
Incorporated an indicator description as comments within the code to provide better context and understanding
Sürüm Notları
⋅
Moved "Normal Distribution Asymmetry & Volatility Zones Indicator" calculations to the "NormalDistributionFunctions" library for easier integration.
Enabled easy integration of the "skewness" function for user scripts, enhancing custom analysis.
hi, u have made a great indicator to the community, please if you can tell us that any clues on how to fine tune the settings such as length z scores coefficient and normalization on the lower time frame such as 5 mins or 15 mins using ? thanks so much !
tkarolak
⋅
@lukricky, Source: Definition: The price source for indicator calculations, typically the closing price is used but it could be ohlc4. Tuning: You might want to experiment with different sources to see which one gives the most reliable signals. For lower time frames, the closing price generally works well.
Distribution Length: Definition: It is the number of bars used to calculate the skewness and other statistical measures. Tuning: Lower values (50-100): Might be more responsive to recent price actions but can also lead to more false signals. Higher values (100-180): Could provide more stable signals but might be less responsive to recent price changes. Strategy: Start with a moderate value and adjust incrementally while observing the effect on the indicator's performance.
Z-score Coefficient: Definition: It defines the volatility threshold for determining buy/sell zones. Tuning: Lower values (1-1.5): Could lead to more frequent signals but potentially with a higher number of false signals. Higher values (2-3): Might offer signals with higher confidence but less frequently. Strategy: Begin with a moderate value and adjust incrementally while focusing on the quality of the signals.
Plot Normalized: Definition: Switch between raw and normalized skewness values. Tuning: True: Helps in understanding how the current skewness value deviates from a moving average of recent skewness values, providing a more stable view. False: Provides a raw and possibly more responsive insight into the market conditions. Strategy: Try both settings and choose the one that aligns well with your trading style and the prevailing market conditions.
Length for Normalization: Definition: The number of bars used for normalizing the skewness value. Tuning: Lower values (7-14): Could provide a more immediate reaction to price changes but can be noisy. Higher values (15-50): May offer a smoother representation but with a delay in reacting to recent price changes. Strategy: Experiment with various lengths to find the optimum balance between responsiveness and noise reduction.
General Strategies for Fine-Tuning: Backtesting: Backtest the indicator with different settings to see how it would have performed in the past. Correlation with other indicators: Use other indicators alongside to corroborate the signals generated. Real-time testing: After backtesting, apply the settings in real-time but initially with lower stakes to understand the practical utility better. Patience and Observation: Take time to observe how the settings work over different market conditions. Fine-tuning is an iterative process, and understanding the nuances takes time. Remember, there is no one-size-fits-all setting; what works best can vary significantly depending on the individual trading style and the asset being traded. It is advised to do proper testing before using any settings for live trading.
lukricky
⋅
@tkarolak, thanks for your richful info, i may need some times to digest first, thanks for your help