Sigma Channel [JOAT]

JOAT Sigma Channel [JOAT]

Introduction

JOAT Sigma Channel is an open-source regression-based channel overlay built to identify the best-fit directional corridor across a search range of candidate windows.

It is designed to show whether price is traveling normally inside a fitted corridor, stretching away from it, reclaiming it, or moving into stress territory.

The problem it solves is model selection.

A fixed-length regression channel can look excellent in one regime and poor in the next.

If the market accelerates, slows down, or shifts its dominant drift horizon, a static window becomes less useful.

Sigma Channel solves that by searching a range of possible windows and selecting the strongest available fit.

That fit becomes the active corridor.

Around it the script builds multiple sigma tiers.

These tiers create a richer price-state map than a single upper and lower band.

The result is a more useful framework for reading acceptance, stretch, reclaim, and exhaustion.



Core Concepts

1. Multi-Window OLS Search

The script evaluates multiple candidate regression windows and scores them by fit quality.

for len = minWindow to maxWindow by stepWindow
    [candidateSlope, candidateIntercept, candidateR2, candidateSigma] = f_model(len)

2. Sigma-Tier Envelope Stack

The fitted centerline is surrounded by inner, core, outer, and stress layers.

3. Slope and Quality Diagnostics

The chosen model exposes both slope and fit quality.

4. Reclaim and Acceptance States

The script identifies when price reclaims or accepts back inside the corridor after extension.

5. Stress-State Shading

The most extreme statistical layer is visually emphasized.

6. Forward Projection

The active model projects forward to keep the corridor useful at the right edge.

7. Residual Awareness

Residual behavior helps judge whether the active model remains representative.

8. Gradient Candle Context

Bar coloring transitions with the current statistical state.



Features

• Adaptive regression search: scans multiple windows instead of using one fixed length
• Inner, core, outer, and stress bands: multiple sigma tiers for normal and abnormal travel
• Slope-aware corridor logic: distinguishes positive and negative drift
• Reclaim and acceptance events: return-to-channel behavior is identified
• Stress shading: abnormal statistical extension is highlighted
• Forward projection: the active corridor extends to the chart edge
• Gradient candle tinting: bar color reflects the current z-state
• Dashboard: slope, quality, window, and deviation state are summarized

Input Parameters

Model Search:

• Minimum Window
• Maximum Window
• Window Step
• Minimum R-Squared
• Projection Bars

Deviation Envelope:

• Inner Sigma
• Core Sigma
• Outer Sigma
• Stress Sigma

Filter Stack / Visual System:

• Bias EMA
• ATR Length
• Momentum RSI
• Use EMA Bias Gate
• Use RSI Gate
• Use Volume Gate
• Tint Bars
• Show Projection
• Show Dashboard

How to Use This Indicator

Step 1: Check the active slope and whether the corridor is upward, downward, or balanced.

Step 2: Check fit quality before trusting the active statistical path.

Step 3: Read whether price is inside the core corridor, at the outer layer, or in stress territory.

Step 4: Watch reclaims back into the channel after extension.

Step 5: Use the projection to organize the near-future chart space.

Indicator Limitations

• The selected best-fit window can change as the market evolves
• Linear regression becomes less representative in strongly nonlinear markets
• Statistical extension does not guarantee immediate reversal
• The indicator measures deviation from a model, not directional certainty

Originality Statement

This script is original in the way it combines adaptive regression selection, multi-tier sigma structure, reclaim logic, stress-state shading, and forward projection into one corridor framework.

The goal is not just to draw a regression channel.

The goal is to keep the active model responsive while preserving statistical context.

Disclaimer

This indicator is provided for educational and informational purposes only.

It is not financial advice.

Regression fit and statistical deviation do not predict future price with certainty.

Markets can remain extended or break away from the active fit entirely.

Best Use Cases

• Reading whether price is behaving normally inside a fitted directional corridor
• Identifying statistical stretch and stress states
• Watching for reclaim behavior after extension
• Combining statistical deviation with separate structure or liquidity analysis

Interpretation Notes

The channel should be trusted more when fit quality is stronger and the slope is clear.

Core travel is generally more normal than outer-band travel.

Stress states are especially useful when they coincide with separate structural or participation warnings.

The projection should be read as a continuation of the current best-fit model, not as a forecast guarantee.

Publication Notes

This script is intended to be published with a clean chart where the corridor, the active slope, and at least one reclaim or extension state are obvious.

The example chart should help the viewer understand how the band hierarchy works.

Avoid combining it with unrelated overlays in the publication image.

-Made with passion by jackofalltrades