VIX Z-Score (Inverted)

📘 Indicator: VIX Z-Score (Inverted) + Table
🔍 Overview
This indicator calculates the Z-Score of the VIX (Volatility Index) and inverts it to identify potential buying opportunities during periods of fear and caution during periods of extreme optimism. The Z-Score is smoothed and visually displayed alongside a dynamic info table.

⚙️ How It Works
VIX Data: The VIX (ticker: CBOE:VIX) is pulled in real time.

Z-Score Calculation:

𝑍
=
(
𝑉
𝐼
𝑋
−
mean
)
standard deviation
Z=
standard deviation
(VIX−mean)
​

Over a customizable lookback period (default: 50).

Inversion:
Since high VIX usually means fear (often a contrarian buying signal), we invert the Z-Score:

𝑍
inv
=
−
𝑍
Z
inv
​
=−Z
Smoothing:
An EMA is applied to reduce noise and false signals.

Clamping:
The Z-Score is linearly scaled and capped between +2 and -2 for easy visualization in the info table.

📊 Z-Score Table (Top-Right)
Range Interpretation Table Color
+1.5 to +2 Extreme fear → Buy zone 🟩 Green
+0.5 to +1.5 Moderate fear 🟨 Lime
–0.5 to +0.5 Neutral ⬜ Gray
–0.5 to –1.5 Growing complacency 🟧 Orange
–1.5 to –2 Extreme optimism → Caution 🟥 Red

The current Z-Score (clamped version) is shown in real time on the right-hand info panel.

🧠 How to Use It
+2 Zone (Table: Green):
Market fear is at an extreme. Historically, such conditions are contrarian bullish—possible entry zones.

–2 Zone (Table: Red):
Indicates extreme optimism and low fear. Often a signal to be cautious or take profits.

Middle range (±0.5):
Market is neutral. Avoid major decisions based solely on sentiment here.

🧪 Best Practices
Combine with price action, volume, or trend filters.

Works well on daily or 4H timeframes.

Not a standalone signal—best used to confirm or fade sentiment extremes.