Z Score Overlay [BigBeluga]

🔵 OVERVIEW
A clean and effective Z-score overlay that visually tracks how far price deviates from its moving average. By standardizing price movements, this tool helps traders understand when price is statistically extended or compressed—up to ±4 standard deviations. The built-in scale and real-time bin markers offer immediate context on where price stands in relation to its recent mean.

🔵 CONCEPTS

• Z Score Calculation:
    Z = (Close − SMA) ÷ Standard Deviation
    This formula shows how many standard deviations the current price is from its mean.
  
• Statistical Extremes:
    • Z > +2 or Z < −2 suggests statistically significant deviation.
    • Z near 0 implies price is close to its average.
  
• Standardization of Price Behavior: Makes it easier to compare volatility and overextension across timeframes and assets.
  

🔵 FEATURES

• Colored Z Line: Gradient coloring based on how far price deviates—
    • Red = oversold (−4),
    • Green = overbought (+4),
    • Yellow = neutral (~0).
  
• Deviation Scale Bar: A vertical scale from −4 to +4 standard deviations plotted to the right of price.
  
• Active Z Score Bin: Highlights the current Z-score bin with a “◀” arrow
  
• Context Labels: Clear numeric labels for each Z-level from −4 to +4 along the side.
  
• Live Value Display: Shows exact Z-score on the active level.
  
• Non-intrusive Overlay: Can be applied directly to price chart without changing scaling behavior.
  

🔵 HOW TO USE

• Identify overbought/oversold areas based on +2 / −2 thresholds.
  
• Spot potential mean reversion trades when Z returns from extreme levels.
  
• Confirm strong trends when price remains consistently outside ±2.
  
• Use in multi-timeframe setups to compare strength across contexts.
  

🔵 CONCLUSION
Z Score Overlay [BigBeluga] transforms raw price action into a normalized statistical view, allowing traders to easily assess deviation strength and mean-reversion potential. The intuitive scale and color-coded display make it ideal for traders seeking objective, volatility-aware entries and exits.