OPEN-SOURCE SCRIPT
Multi-Sigma Bands [fmb]
Multi-Sigma Bands [fmb]
What It Is
Multi-Sigma Bands is a volatility-based statistical channel that visualizes how far price deviates from its long-term mean in standard deviation (σ) units. It offers a high-signal, low-noise view of trend strength, volatility regimes, and statistical extremes directly on price, keeping the chart clean and focused without any secondary pane.
What It Does
The indicator calculates a central basis line—using SMA, EMA, RMA, or Linear Regression—and surrounds it with multi-sigma envelopes, typically at ±1σ, ±2σ, and ±3σ. These bands represent the statistically expected ranges of price movement. The blue zone (±1σ) reflects normal volatility where roughly two-thirds of price activity occurs. The yellow zone (±2σ) captures moderate extensions that account for most of the remaining moves, while the red zone (±3σ) marks rare extremes that fall outside the 99% probability boundary. Each region is color-coded for immediate visual interpretation, allowing you to see at a glance when price is trading in calm, stretched, or extreme conditions.
Why It Was Built
Conventional Bollinger Bands tend to compress and expand too aggressively over short windows, making it difficult to read structural volatility changes. Multi-Sigma Bands addresses this by providing a longer statistical view. It helps distinguish mean reversion from sustained breakouts, quantifies trend acceleration or exhaustion, and highlights when markets move into statistically unusual zones that often precede reversals or volatility resets. It is particularly effective on monthly or weekly charts for assessing where a market sits within its long-term distribution. For instance, when the S&P 500 trades above +2σ for several months, risk-reward conditions often tighten.
How It Works
You can choose your preferred basis type—SMA, EMA, RMA, or Linear Regression—and decide whether to force monthly data even on lower timeframes for consistent macro analysis. Adjustable parameters include length, sigma multipliers, and standard deviation smoothing for fine-tuning sensitivity. The script automatically fills the space between the bands, creating a layered color map that clearly shows each volatility zone.
How To Use
When price remains above +1σ, it often confirms strong upside momentum. Consistent rejections at ±2σ or ±3σ zones can suggest exhaustion and potential mean reversion. Narrowing bands often precede volatility expansion, signaling that a breakout or trend change may be near. Multi-Sigma Bands can be used on its own for macro context or as an overlay with directional systems to refine entries and exits.
Credits
Created by Fullym0bile
Enhanced with leading trend detection logic.
fullymobile.ca
What It Is
Multi-Sigma Bands is a volatility-based statistical channel that visualizes how far price deviates from its long-term mean in standard deviation (σ) units. It offers a high-signal, low-noise view of trend strength, volatility regimes, and statistical extremes directly on price, keeping the chart clean and focused without any secondary pane.
What It Does
The indicator calculates a central basis line—using SMA, EMA, RMA, or Linear Regression—and surrounds it with multi-sigma envelopes, typically at ±1σ, ±2σ, and ±3σ. These bands represent the statistically expected ranges of price movement. The blue zone (±1σ) reflects normal volatility where roughly two-thirds of price activity occurs. The yellow zone (±2σ) captures moderate extensions that account for most of the remaining moves, while the red zone (±3σ) marks rare extremes that fall outside the 99% probability boundary. Each region is color-coded for immediate visual interpretation, allowing you to see at a glance when price is trading in calm, stretched, or extreme conditions.
Why It Was Built
Conventional Bollinger Bands tend to compress and expand too aggressively over short windows, making it difficult to read structural volatility changes. Multi-Sigma Bands addresses this by providing a longer statistical view. It helps distinguish mean reversion from sustained breakouts, quantifies trend acceleration or exhaustion, and highlights when markets move into statistically unusual zones that often precede reversals or volatility resets. It is particularly effective on monthly or weekly charts for assessing where a market sits within its long-term distribution. For instance, when the S&P 500 trades above +2σ for several months, risk-reward conditions often tighten.
How It Works
You can choose your preferred basis type—SMA, EMA, RMA, or Linear Regression—and decide whether to force monthly data even on lower timeframes for consistent macro analysis. Adjustable parameters include length, sigma multipliers, and standard deviation smoothing for fine-tuning sensitivity. The script automatically fills the space between the bands, creating a layered color map that clearly shows each volatility zone.
How To Use
When price remains above +1σ, it often confirms strong upside momentum. Consistent rejections at ±2σ or ±3σ zones can suggest exhaustion and potential mean reversion. Narrowing bands often precede volatility expansion, signaling that a breakout or trend change may be near. Multi-Sigma Bands can be used on its own for macro context or as an overlay with directional systems to refine entries and exits.
Credits
Created by Fullym0bile
Enhanced with leading trend detection logic.
fullymobile.ca
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.