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    Standard Error Bands (SEB)
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      Standard Error Bands (SEB)

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        Article summary

        The Standard Error Bands (SEB) indicator shows the direction of the current trend by plotting a linear regression average value (middle line) and the volatility deviation by plotting upper and lower bands. The deviation from the linear regression indicates increased volatility and risk. The indicator is similar to Bollinger Bands (BB) with the only difference that SEB uses smoothed linear regression instead of moving average that is used in BB.

        The middle line is calculated as the linear regression for each bar:

        y = a + bx
        b = (nΣxy - ΣxΣy) / ( nΣx2 - (Σx)2 ))
        a = (Σy - bΣx) / n

        where:
        y – the data price source
        x – the number of bars
        a – the constant (the value when x equals zero)
        b – the slope of the line
        n – the number of data points selected

        The standard error bands are calculated as follows:

        UpperBand = MidLine + 2 x StdError
        LowerBand = MidLine - 2 x StdError

        where:
        StdError – the aproximate standard deviation

        Standard Error BandsStandard Error Bands

        INPUTS

        Price
        The following data sources are available for the price:
        • Open. The Open Price of every bar for the specified period.
        • High. The High Price of every bar for the specified period. 
        • Low. The Low Price of every bar for the specified period.
        • Close. The Close Price of every bar for the specified period. 
        • Median. The Median Price of every bar for the specified period - (High + Low) / 2.
        • Typical. The sum of High, Low, and Close prices divided by 3 for the specified period- (High + Low + Close) / 3.
        • OHLC average. The arithmetical mean of High, Low, Open, and Close prices for the specified period - (Open + High + Low + Close) / 4.
        • Volume. The Close Price of every bar + average volume of an asset for the specified period.
        InputDescription
        DisplaceThe displacement of the indicator in bars
        LinRegLengthThe number of bars used to calculate the Linear Regression (MidLine)
        SmLengthThe number of bars used to smooth the Linear Regression (MidLine)
        NumDevUpThe multiplier for the stardard error band used in the upward shift calculation 
        NumDevDownThe multiplier for the standard error band used in the downward shift calculation

        PLOTS

        The plot renders the data you are working with on the chart. You can show/hide a plot by clicking the corresponding item in the settings. Every plot has a set of basic settings that you can change: color, weight, and type.

        PlotDescription
        LowerBandThe lower standard error band
        MidLineThe Linear Regression plot
        UpperBandThe upper stardard error band 
        Color

        Click the color rectangle under the plot's name to open the palette. Use the slider at the bottom to set the opacity of the color.

        Palette

        To create a custom color:

        1. Clickto open the color picker
        2. By using the slider at the bottom, adjust the main color
        3. Then, set a shade for the main color on the palette

        The custom-created colors are added to your palette. To remove a custom color, drag it out of the palette.

        Weight
        Change the value (in px) to adjust the thickness of the plot.
        Type
        The following plot types are available:
        • Linear. The plot is displayed as a line.
        • Column. The plot is displayed as a histogram.
        • Difference. The plot is displayed as a line which represents the difference between High and Low prices of the bar.
        • Points. The plot is displayed as points.
        • Text above candle. The plot is displayed as the price labels above candles on the chart.
        • Text below candle. The plot is displayed as the price labels below candles on the chart.
        • Triangle above candle. The plot is displayed as triangles above candles on the chart.
        • Color candle. The candles on candle-type charts are highlighted with specified colors.

        OVERLAYING

        Check Overlaying to display the indicator on the chart. Otherwise, the indicator is shown in a study pane down below.

        Note: To reset the settings, click Restore to Default next to the SETTINGS: INDICATOR'S TITLE
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