Z-Score Trend Channels [BackQuant]Z-Score Trend Channels
A self-contained price-statistics framework that turns a rolling z-score into price channels, bias states, and trade markers. Run either trend-following or mean-reversion from the same tool with clear, on-chart context.
What it is
A rolling statistical map that measures how far price is from its recent average in standard-deviation units (z-score).
Adaptive channels drawn in price space from fixed z thresholds, so the rails breathe with volatility.
A simple trend proxy from z-score momentum to separate trending from ranging conditions.
On-chart signals for pullback entries, stretched extremes, and practical exits.
Core idea (plain English math)
Rolling mean and volatility - Over a lookback you get the average price and its standard deviation.
Z-score - How many standard deviations the current price is above or below its average: z = (price - mean) / stdev. z near 0 means near average; positive is above; negative is below.
Noise control - An EMA smooths the raw z to reduce jitter and false flickers.
Channels back in price - Fixed z levels are converted back to price to form the upper, lower, and extreme rails.
Trend proxy - A smoothed change in z is used as a lightweight trend-strength line. Positive strength with positive z favors uptrend; negative strength with negative z favors downtrend.
What you see on the chart
Channels and fills - Mean, upper, lower, and optional extreme lines. The area mean->upper tints with the bearish color, mean->lower tints with the bullish color.
Background tint (optional) - Soft green, red, or neutral based on detected trend state.
Signals - Bullish Entry (triangle up) when z exits the oversold zone upward; Bearish Entry (triangle down) when z exits the overbought zone downward; Extreme markers (diamonds) at the extreme bands with a one-bar turn.
Table - Current z, trend state, trend strength, distance to bands, market state tag, and a quick volatility regime label.
Edge labels - MEAN, OB, and OS labels slightly projected forward with level values.
Inputs you will actually use
Z-Score Period - Lookback for mean and stdev. Larger = slower and steadier rails, smaller = more reactive.
Smoothing Period - EMA on z. Lower = earlier but choppier flips; higher = later but cleaner.
Price Source - Default hlc3. Choose close if you prefer session-close logic.
Upper and Lower Thresholds - Default around +2.0 and -2.0. Tighten for more signals, widen for fewer and stronger.
Extreme Upper and Lower - Deeper stretch guards, e.g., +/- 2.5.
Strength Period - EMA on z momentum. Sets how fast the trend proxy flips.
Trend Threshold - Minimum absolute z to accept a directional bias.
Visual toggles - Channels, signals, background tint, stats table, colors, and optional last-bar trend label.
How to use it: trend-following playbook
Read the state - Uptrend when z > Trend Threshold and trend strength > 0. Downtrend when z < -Trend Threshold and trend strength < 0. Neutral otherwise.
Entries - In an uptrend, prefer Bullish Entry signals that fire near the lower channel. In a downtrend, prefer Bearish Entry signals that fire near the upper channel.
Stops - Conservative: beyond the extreme channel on your side. Tighter: just outside the standard band that framed the signal.
Exits - For longs, exit or trim on a cross back through z = 0 or a clean tag of the upper threshold. For shorts, mirror with z = 0 up-cross or tag of the lower threshold. You can also reduce if trend strength flips against you.
Adds - In strong trends, additional signals near your side’s band can be add points. Avoid adding once z hovers near the opposite band for several bars.
How to use it: mean-reversion playbook
Find stretch - Standard reversions: Bullish Entry when z leaves the oversold zone upward; Bearish Entry when z leaves the overbought zone downward. Aggressive reversions: Extreme markers at extreme bands with a one-bar turn.
Entries - Take the signal as price exits the zone. Prefer setups where trend strength is near zero or tilting against the prior push.
Targets - First target is the mean line. A runner can aim for the opposite standard channel if momentum keeps flipping.
Stops - Outside the extreme band beyond your entry. If fading without extremes, place risk just beyond the opposite standard band.
Filters - Optional: skip counter-trend fades against a very strong trend state unless your risk is tight and predefined.
Reading the stats table
Current Z-Score - Magnitude and sign of displacement now.
Trend State - Uptrend, Downtrend, or Ranging.
Trend Strength - Smoothed z momentum. Higher absolute values imply stronger directional conviction.
Distance to Upper/Lower - Percent distance from price to each band, useful for sizing targets or judging room left.
Market State - Overbought, Oversold, Extreme OB, Extreme OS, or Normal.
Volatility Regime - High, Normal, or Low relative to recent distribution. Expect bands to widen in High and tighten in Low.
Parameter guidance (conceptual)
Z-Score Period - Choose longer for a structural mean, shorter for a reactive mean.
Smoothing Period - Lower for earlier but noisier reads; higher for slower but steadier reads.
Thresholds - Start around +/- 2.0. Tighten for scalping or quiet ranges. Widen for noisy or fast markets.
Trend Threshold and Strength Period - Raise to avoid weak, transient bias. Lower to capture earlier regime shifts.
Practical examples
Trend pullback long - State shows Uptrend. Price tests the lower channel; z dips near or below the lower threshold; a Bullish Entry prints. Stop just below extreme lower; first target mean; keep a runner if trend strength stays positive.
Mean-revert short - State is Ranging. z tags the extreme upper, an Extreme Bearish marker prints, then a Bearish Entry prints on the leave. Stop above extreme upper; target the mean; consider a runner toward the lower channel if strength turns negative.
Potential Questions you might have
Why z-score instead of fixed offsets - Because the bands adapt with volatility. When the tape gets quiet the rails tighten, when it runs hot the rails expand. Your entries stay normalized.
Do I need both modes - No. Many users run only trend pullbacks or only mean-reversions. The tool lets you toggle what you need and keep the chart readable.
Multi-timeframe workflow - A common approach is to set bias from a higher timeframe’s trend state and execute on a lower timeframe’s signals that align with it.
Summary
Z-Score Trend Channels gives you an adaptive mean, volatility-aware rails, a simple trend lens, and clear signals. Trade the trend by buying pullbacks in green and selling pullbacks in red, or fade stretched extremes back to the mean with defined risk. One framework, two strategies, consistent logic.
Diphunter
Dip Hunter [BackQuant]Dip Hunter
What this tool does in plain language
Dip Hunter is a pullback detector designed to find high quality buy-the-dip opportunities inside healthy trends and to avoid random knife catches. It watches for a quick drop from a recent high, checks that the drop happened with meaningful participation and volatility, verifies short-term weakness inside a larger uptrend, then scores the setup and paints the chart so you can act with confidence. It also draws clean entry lines, provides a meter that shows dip strength at a glance, and ships with alerts that match common execution workflows.
How Dip Hunter thinks
It defines a recent swing reference, measures how far price has dipped off that high, and only looks at candidates that meet your minimum percentage drop.
It confirms the dip with real activity by requiring a volume spike and a volatility spike.
It checks structure with two EMAs. Price should be weak in the short term while the larger context remains constructive.
It optionally requires a higher-timeframe trend to be up so you focus on pullbacks in trending markets.
It bundles those checks into a score and shows you the score on the candles and on a gradient meter.
When everything lines up it paints a green triangle below the bar, shades the background, and (if you wish) draws a horizontal entry line at your chosen level.
Inputs and what they mean
Dip Hunter Settings
• Vol Lookback and Vol Spike : The script computes an average volume over the lookback window and flags a spike when current volume is a multiple of that average. A multiplier of 2.0 means today’s volume must be at least double the average. This helps filter noise and focuses on dips that other traders actually traded.
• Fast EMA and Slow EMA : Short-term and medium-term structure references. A dip is more credible if price closes below the fast EMA while the fast EMA is still below the slow EMA during the pullback. That is classic corrective behavior inside a larger trend.
• Price Smooth : Optional smoothing length for price-derived series. Use this if you trade very noisy assets or low timeframes.
• Volatility Len and Vol Spike (volatility) : The script checks both standard deviation and true range against their own averages. If either expands beyond your multiplier the market confirms the move with range.
• Dip % and Lookback Bars : The engine finds the highest high over the lookback window, then computes the percentage drawdown from that high to the current close. Only dips larger than your threshold qualify.
Trend Filter
• Enable Trend Filter : When on, Dip Hunter will only trigger if the market is in an uptrend.
• Trend EMA Period : The longer EMA that defines the session’s backbone trend.
• Minimum Trend Strength : A small positive slope requirement. In practice this means the trend EMA should be rising, and price should be above it. You can raise the value to be more selective.
Entries
• Show Entry Lines : Draws a horizontal guide from the signal bar for a fixed number of bars. Great for limit orders, scaling, or re-tests.
• Line Length (bars) : How far the entry guide extends.
• Min Gap (bars) : Suppresses new entry lines if another dip fired recently. Prevents clutter during choppy sequences.
• Entry Price : Choose the line level. “Low” anchors at the signal candle’s low. “Close” anchors at the signal close. “Dip % Level” anchors at the theoretical level defined by recent_high × (1 − dip%). This lets you work resting orders at a consistent discount.
Heat / Meter
• Color Bars by Score : Colors each candle using a red→white→green gradient. Red is overheated, green is prime dip territory, white is neutral.
• Show Meter Table : Adds a compact gradient strip with a pointer that tracks the current score.
• Meter Cells and Meter Position : Resolution and placement of the meter.
UI Settings
• Show Dip Signals : Plots green triangles under qualifying bars and tints the background very lightly.
• Show EMAs : Plots fast, slow, and the trend EMA (if the trend filter is enabled).
• Bullish, Bearish, Neutral colors : Theme controls for shapes, fills, and bar painting.
Core calculations explained simply
Recent high and dip percent
The script finds the highest high over Lookback Bars , calls it “recent high,” then calculates:
dip% = (recent_high − close) ÷ recent_high × 100.
If dip% is larger than Dip % , condition one passes.
Volume confirmation
It computes a simple moving average of volume over Vol Lookback . If current volume ÷ average volume > Vol Spike , we have a participation spike. It also checks 5-bar ROC of volume. If ROC > 50 the spike is forceful. This gets an extra score point.
Volatility confirmation
Two independent checks:
• Standard deviation of closes vs its own average.
• True range vs ATR.
If either expands beyond Vol Spike (volatility) the move has range. This prevents false triggers from quiet drifts.
Short-term structure
Price should close below the Fast EMA and the fast EMA should be below the Slow EMA at the moment of the dip. That is the anatomy of a pullback rather than a full breakdown.
Macro trend context (optional)
When Enable Trend Filter is on, the Trend EMA must be rising and price must be above it. The logic prefers “micro weakness inside macro strength” which is the highest probability pattern for buying dips.
Signal formation
A valid dip requires:
• dip% > threshold
• volume spike true
• volatility spike true
• close below fast EMA
• fast EMA below slow EMA
If the trend filter is enabled, a rising trend EMA with price above it is also required. When all true, the triangle prints, the background tints, and optional entry lines are drawn.
Scoring and visuals
Binary checks into a continuous score
Each component contributes to a score between 0 and 1. The script then rescales to a centered range (−50 to +50).
• Low or negative scores imply “overheated” conditions and are shaded toward red.
• High positive scores imply “ripe for a dip buy” conditions and are shaded toward green.
• The gradient meter repeats the same logic, with a pointer so you can read the state quickly.
Bar coloring
If you enable “Color Bars by Score,” each candle inherits the gradient. This makes sequences obvious. Red clusters warn you not to buy. White means neutral. Increasing green suggests the pullback is maturing.
EMAs and the trend EMA
• Fast EMA turns down relative to the slow EMA inside the pullback.
• Trend EMA stays rising and above price once the dip exhausts, which is your cue to focus on long setups rather than bottom fishing in downtrends.
Entry lines
When a fresh signal fires and no other signal happened within Min Gap (bars) , the indicator draws a horizontal level for Line Length bars. Use these lines for limit entries at the low, at the close, or at the defined dip-percent level. This keeps your plan consistent across instruments.
Alerts and what they mean
• Market Overheated : Score is deeply negative. Do not chase. Wait for green.
• Close To A Dip : Score has reached a healthy level but the full signal did not trigger yet. Prepare orders.
• Dip Confirmed : First bar of a fresh validated dip. This is the most direct entry alert.
• Dip Active : The dip condition remains valid. You can scale in on re-tests.
• Dip Fading : Score crosses below 0.5 from above. Momentum of the setup is fading. Tighten stops or take partials.
• Trend Blocked Signal : All dip conditions passed but the trend filter is offside. Either reduce risk or skip, depending on your plan.
How to trade with Dip Hunter
Classic pullback in uptrend
Turn on the trend filter.
Watch for a Dip Confirmed alert with green triangle.
Use the entry line at “Dip % Level” to stage a limit order. This keeps your entries consistent across assets and timeframes.
Initial stop under the signal bar’s low or under the next lower EMA band.
First target at prior swing high, second target at a multiple of risk.
If you use partials, trail the remainder under the fast EMA once price reclaims it.
Aggressive intraday scalps
Lower Dip % and Lookback Bars so you catch shallow flags.
Keep Vol Spike meaningful so you only trade when participation appears.
Take quick partials when price reclaims the fast EMA, then exit on Dip Fading if momentum stalls.
Counter-trend probes
Disable the trend filter if you intentionally hunt reflex bounces in downtrends.
Require strong volume and volatility confirmation.
Use smaller size and faster targets. The meter should move quickly from red toward white and then green. If it does not, step aside.
Risk management templates
Stops
• Conservative: below the entry line minus a small buffer or below the signal bar’s low.
• Structural: below the slow EMA if you aim for swing continuation.
• Time stop: if price does not reclaim the fast EMA within N bars, exit.
Position sizing
Use the distance between the entry line and your structural stop to size consistently. The script’s entry lines make this distance obvious.
Scaling
• Scale at the entry line first touch.
• Add only if the meter stays green and price reclaims the fast EMA.
• Stop adding on a Dip Fading alert.
Tuning guide by market and timeframe
Equities daily
• Dip %: 1.5 to 3.0
• Lookback Bars: 5 to 10
• Vol Spike: 1.5 to 2.5
• Volatility Len: 14 to 20
• Trend EMA: 100 or 200
• Keep trend filter on for a cleaner list.
Futures and FX intraday
• Dip %: 0.4 to 1.2
• Lookback Bars: 3 to 7
• Vol Spike: 1.8 to 3.0
• Volatility Len: 10 to 14
• Use Min Gap to avoid clusters during news.
Crypto
• Dip %: 3.0 to 6.0 for majors on higher timeframes, lower on 15m to 1h
• Lookback Bars: 5 to 12
• Vol Spike: 1.8 to 3.0
• ATR and stdev checks help in erratic sessions.
Reading the chart at a glance
• Green triangle below the bar: a validated dip.
• Light green background: the current bar meets the full condition.
• Bar gradient: red is overheated, white is neutral, green is dip-friendly.
• EMAs: fast below slow during the pullback, then reclaim fast EMA on the bounce for quality continuation.
• Trend EMA: a rising spine when the filter is on.
• Entry line: a fixed level to anchor orders and risk.
• Meter pointer: right side toward “Dip” means conditions are maturing.
Why this combination reduces false positives
Any single criterion will trigger too often. Dip Hunter demands a dip off a recent high plus a volume surge plus a volatility expansion plus corrective EMA structure. Optional trend alignment pushes odds further in your favor. The score and meter visualize how many of these boxes you are actually ticking, which is more reliable than a binary dot.
Limitations and practical tips
• Thin or illiquid symbols can spoof volume spikes. Use larger Vol Lookback or raise Vol Spike .
• Sideways markets will show frequent small dips. Increase Dip % or keep the trend filter on.
• News candles can blow through entry lines. Widen stops or skip around known events.
• If you see many back-to-back triangles, raise Min Gap to keep only the best setups.
Quick setup recipes
• Clean swing trader: Trend filter on, Dip % 2.0 to 3.0, Vol Spike 2.0, Volatility Len 14, Fast 20 EMA, Slow 50 EMA, Trend 100 EMA.
• Fast intraday scalper: Trend filter off, Dip % 0.7 to 1.0, Vol Spike 2.5, Volatility Len 10, Fast 9 EMA, Slow 21 EMA, Min Gap 10 bars.
• Crypto swing: Trend filter on, Dip % 4.0, Vol Spike 2.0, Volatility Len 14, Fast 20 EMA, Slow 50 EMA, Trend 200 EMA.
Summary
Dip Hunter is a focused pullback engine. It quantifies a real dip off a recent high, validates it with volume and volatility expansion, enforces corrective structure with EMAs, and optionally restricts signals to an uptrend. The score, bar gradient, and meter make reading conditions instant. Entry lines and alerts turn that read into an executable plan. Tune the thresholds to your market and timeframe, then let the tool keep you patient in red, selective in white, and decisive in green.
