MeanReversion - LogReturn/Vola ZScore Pro

MeanReversion – LogReturn / Volatility Z-Score Pro
What this indicator does

MeanReversion – LogReturn / Volatility Z-Score Pro helps you identify when a market move becomes statistically stretched and may be ready to cool down or revert toward normal behavior.

The indicator compares current price movement and current volatility with their own historical behavior and shows both as Z-Scores:

LogReturn Z-Score (blue) → how unusually strong the price move is

Volatility Z-Score (black) → how unusually aggressive the market activity is

Instead of guessing whether a move is “too big”, the indicator tells you if it is normal, extended, or extreme relative to the past.

How to use it

Choose a lookback period
The period defines what “normal” means.

Larger period → long-term context

Smaller period → short-term sensitivity

Read the Z-Scores

Around 0 → normal behavior

Around ±1 → noticeable move

Around ±2 or more → statistically stretched

Very high values → potential exhaustion conditions

Practical trading interpretation

High positive price Z-Score → market may be overheated

High negative price Z-Score → market may be oversold

Rising volatility Z-Score → emotional / unstable environment

Extreme move + extreme volatility → often late-stage move

Typical workflow

Use your own entry system

Use this indicator as a context filter

Avoid chasing extremes

Look for mean-reversion or pullback opportunities when moves become statistically abnormal

Who this is for

Best suited for:

Mean-reversion traders

Swing traders looking for exhaustion zones

Traders who want objective overbought/oversold context

System traders who need a statistical regime filter

Less useful for:

Pure breakout traders who intentionally chase momentum extremes

Notes

This indicator does not generate direct buy/sell signals — it measures probability context.

Works on all markets: Forex, Indices, Stocks, Crypto, Commodities.

Combine with structure, trend direction, or support/resistance for higher-quality decisions.