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# Market Meanness Index-Price Changes

383 2
This is the Market Mean index. It is used to identify if the market is really trending or if it is range bound(random). In theory, a random sample will be mean reverting 75% of the time. This indicator checks to see what how much the market is mean reverting and converts it to a percentage. If the index is around 75 or higher than the price curve of the market is range bound and there is no trend from a statistical standpoint. If the index is below 75 this means the price curve of the market is in fact trending in a direction as the market is not reverting as much as it should if it were truly following a random/range bound price curve.
//@version=2
study("MMI-Price Changes")
// Set Inputs
inputLength=input(300)
topband=input(76)
bottomband=input(74)

// Get Average Price Change
mean(price1, price2, length) =>
sum = 0
for i = 0 to length
if price1[i] - price2[i] > 0
sum := sum + (price1[i] - price2[i])
else
sum := sum + (price2[i] - price1[i])
sum / length

// Market Meaness Index Function
MMI(price1,price2, length) =>
m = mean(open,close,inputLength)
nh = 0
nl = 0
for i = 1 to length
if price1[i] - price2[i] > 0
if (price1[i] - price2[i]) > m
if (price1[i] - price2[i]) > (price1[i+1] - price2[i+1])
nl := nl + 1
else
if (price2[i] - price1[i]) < m
if (price2[i] - price1[i]) < (price2[i+1] - price1[i+1])
nh := nh + 1
100 - 100*(nl + nh)/(length - 1)

u=plot(topband)
l=plot(bottomband)
t=plot(90)
b=plot(60)
fill(u,l,black)
fill(t,u,yellow)
fill(b,l,blue)
plot(MMI(open,close,inputLength))
Thank you for making this!
Hi LevyFlight,
thanks for sharing this.

Is it normal that in DAX the value never go above 75 in more than 10 years?
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