PriceVar% is an indicator designed to measure the percentage difference between the price and a moving average, highlighting the strength of the market movement in relation to a reference value.
How it works
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If the closing price is above the average, the calculation is:
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If the closing price is below the average, the calculation is:
Var = (Low - MA) / MA * 100;
The result is displayed as a percentage histogram (%):
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Green → when the price is above average (buying force).
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Red → when the price is below average (selling force).
Interpretation
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Positive values indicate the distance of the high from the average.
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Negative values indicate the distance of the low from the average.
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The higher the absolute value, the greater the percentage distance of the price from the average.
Practical applications
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Identifying moments of overbought/oversold relative to the average.
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Measuring percentage volatility around the average.
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Aid in breakout or reversal strategies by validating the intensity of the movement.
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Use as a filter in automated systems (e.g. only trade when the percentage change exceeds a certain threshold).
Parameters
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Average period (iPeriod): defines the horizon of the moving average used as a reference.
