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Standard Error Bands (SEB)
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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) / ( nΣx^{2}  (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
INPUTS
Price 

The following data sources are available for the price:

Input  Description 

Displace  The displacement of the indicator in bars 
LinRegLength  The number of bars used to calculate the Linear Regression (MidLine) 
SmLength  The number of bars used to smooth the Linear Regression (MidLine) 
NumDevUp  The multiplier for the stardard error band used in the upward shift calculation 
NumDevDown  The 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.
Plot  Description 

LowerBand  The lower standard error band 
MidLine  The Linear Regression plot 
UpperBand  The 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. To create a custom color:
The customcreated 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:

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