Distance to SMA-20 in Std DeviationsMean reversion

Timeframe M1 · unit sigma

What it measures

The gap between the last close and the 20-bar simple moving average, normalized by the standard deviation of the same 20 closes. It captures how stretched price is relative to its own local volatility - a volatility-adjusted Z-score.

How Janira reads it (bullish vs bearish)

A reading of 0 means price is exactly at the SMA-20. Values above +1.5 indicate that the gap above the average is large even accounting for the recent volatility; below -1.5, the gap below is similarly large. Unlike a raw percentage distance, this indicator automatically scales to the regime: a 1-sigma gap in a volatile session is equivalent to a 1-sigma gap in a quiet session.

In plain language

Instead of asking 'how far above the average is the price?', this asks 'how far above the average is the price, given how much it usually moves?'. Two points above average means little if the market normally swings ten points - but a lot if it normally swings only one point.

Scenarios

• Near 0 (±0.5 sigma): The close is within the normal scatter around the SMA-20. No unusual extension relative to local volatility.
• Between +1 and +1.5 sigma: Price is moderately above its average, within the typical range of upswings. Noticeable but not extreme.
• Above +1.5 sigma: Price has extended notably above its mean relative to its own recent volatility. The stretch is statistically uncommon and historically correlates with above-average return-to-mean potential.
• Below -1.5 sigma: The symmetric downward case - price is stretched significantly below its SMA-20 relative to local volatility.

More mean reversion indicators

Janira computes Distance to SMA-20 in Std Deviations deterministically from live price action, the same way for every reading - no discretion, no hidden weighting. This page explains the method; it is not a live reading and not advice.