Probability Function [racer8]

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It's my birthday today! Just turned 20, so I decided to make another indicator. There's not very many indicators on TV that calculate pure probability. Many indicators on TV have the word "Probability" in their titles but they don't actually calculate probability...I call them "false titles". This indicator aims to change that. This is the indicator that every option trader dreams of having. Even if you're not an options trader, it's still very interesting to know the probability of a price movement.

Probability Function calculates the probability of a data point (price) falling within a certain number of standard deviations away from the mean.
So for example, setting the parameter to 2 standard deviations will calculate the probability of price staying within a 2-standard-deviations-channel away from the mean (or moving average). This description is exactly what Bollinger Bands are...which makes it a direct application of this indicator, and Bollinger Bands are used by many traders.

The indicator's formula is an approximation of the integral of the standard normal distribution function. It uses one parameter called "Standard deviation multiple" (SDM). An input of 1 stdev yields 68%, 2 stdevs yields 95%, 3 stdevs yields approx 99.7%, and so on eventually converging to 100%...and it makes sense the bigger the stdev channel, the more likely price will stay within it.
Enjoy and hit the like button!

Script de código abierto

Siguiendo el verdadero espíritu de TradingView, el autor de este script lo ha publicado en código abierto, para que los traders puedan entenderlo y verificarlo. ¡Un hurra por el autor! Puede utilizarlo de forma gratuita, aunque si vuelve a utilizar este código en una publicación, debe cumplir con las Normas internas. Puede marcarlo como favorito para usarlo en un gráfico.

¿Quiere utilizar este script en un gráfico?


happy birthday to you!
+1 Responder
Happy Birthday! It's great to have you here :)
+1 Responder
racer8 nilux
@nilux, Thanks :)
Hey, happy bday, wish you health and prosperity. Thank you for all your awesome work. Cheers
+1 Responder
racer8 FXPDM
@FXPDM, Thanks :)
Happy birthday. Bro thanks for amazing work
+1 Responder
racer8 pricechart1336
@pricechart1336, Thanks :)
Happy Birthday! Keep up the good work, enjoy the halcyon days.
+1 Responder
Happy birthday and enjoy the best decade of your life!
+1 Responder
Wish you many Happy Returns Of The Day and Winning Trades !
+1 Responder