Z-score Close vs SMA-20Mean reversion

Timeframe M1 · unit sigma

What it measures

How many standard deviations the current close sits above or below its own 20-bar simple moving average. It measures the statistical stretch of price relative to recent history.

How Janira reads it (bullish vs bearish)

Values near 0 indicate price is at its recent average. A value above +1.5 means price is unusually extended upward (roughly the top ~7% of observations in a normal distribution); below -1.5 means unusually extended downward. Values beyond ±2 are rare and suggest strong mean-reversion tension.

In plain language

Imagine a rubber band anchored to the average price of the last 20 candles. This indicator tells you how far you have stretched that rubber band - in units of its own usual stretch. A reading of 2 means you have stretched it twice as far as normal.

Scenarios

• Z-score near 0 (±0.5): Price is orbiting its recent average. The rubber band is relaxed - no particular extension signal either way.
• Z-score above +1.5: Price has moved substantially above its 20-bar mean. In a mean-reverting regime this zone is associated with above-average return-to-mean tension.
• Z-score below -1.5: Price sits substantially below its 20-bar mean. The downward extension creates symmetric upward return-to-mean tension.
• Z-score beyond ±2.5: Rare territory. Either a genuine momentum breakout is consuming the usual reversion tendency, or the price spike is transient and mean-reversion pressure is at its highest.

More mean reversion indicators

Janira computes Z-score Close vs SMA-20 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.