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Traders' Tips | FEB 2003
Traders’ Tips by Technical Analysis, Inc.
Traders’ Tips by Technical Analysis, Inc. • TRADESTATION: Z-SCORE INDICATOR Veronique Valcu’s article “Z-Score Indicator” in this issue provides a description and commentary on a new method of displaying directional change normalized in terms of standard deviation. This indicator can be drawn on a TradeStation screen by using the following function code, called ZScore: Function: ZScore inputs: Price( NumericSeries ), AvgLen( NumericSimple ) ; ZScore = (Price - Average( Price, AvgLen ) ) / StandardDev( Price, AvgLen, 1 ) ; This indicator has two inputs, “Price” and “AvgLen.” Price can be the open, high, low, or close. AvgLen describes the length of the sample considered in the standard deviation calculation.
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