Screener - Mean Reversion Channel

The Screener - Mean Reversion Channel indicator scans up to 40 user-defined symbols to identify assets currently trading within overbought or oversold zones based on mean reversion logic. This tool provides a centralized dashboard to monitor market extremes across multiple instruments and timeframes simultaneously.

Usage

The screener is used to identify potential trend exhaustion or reversal points across a broad watchlist. By monitoring the relationship between price and the Mean Reversion Channel (MRC), the script categorizes symbols into three specific states of overextension:

• Strong: Price has moved significantly beyond the outer channel boundaries, suggesting an extreme overbought or oversold condition.
• Normal: Price is trading within the standard overbought or oversold zone defined by the outer channel multipliers.
• Weak: Price is approaching the outer channel boundaries but has not yet fully penetrated the core overextended zones.

If no assets meet the selected criteria, the dashboard will display "Nothing Interesting." Users should configure their desired 40 symbols in the settings and save them as defaults for consistent multi-asset monitoring.

Details

The script utilizes a Mean Reversion Channel calculation that relies on a central mean line and volatility-based bands. The mean line can be smoothed using various filters, including SuperSmoother, Ehlers EMA, Gaussian, and Butterworth filters.

The bands are calculated using the True Range (TR) smoothed by a SuperSmoother filter, which is then multiplied by user-defined inner and outer multipliers. The screener uses the request.security() function to fetch data for all 40 symbols. Because of the computational requirements of multiple security calls and complex smoothing algorithms, the screener update frequency depends on the platform's processing limits for the selected symbols and timeframes.

Settings

MRC Parameters

• Lookback Period: Determines the number of bars used to calculate the mean line and volatility range.
• Filter Type: Selects the smoothing algorithm for the mean line (e.g., SuperSmoother, EMA, SMA, Gaussian).
• Price Source: Specifies the price data used for the calculation (default is HLC3).
• Inner Channel Size Multiplier: Adjusts the width of the inner channel boundaries.
• Outer Channel Size Multiplier: Adjusts the width of the outer channel boundaries used to define OB/OS zones.

Screening Settings

• Timeframe for Screening: Sets the specific timeframe the screener should analyze for all symbols.
• Screen for Weak OB/OS: Enables or disables detection of assets in the weak overextended zone.
• Screen for OB/OS: Enables or disables detection of assets in the normal overextended zone.
• Screen for Strong OB/OS: Enables or disables detection of assets in the strong overextended zone.

Asset for Screening

• Asset 01 - 40: Individual slots to input the ticker symbols for the assets you wish to monitor.

FAQ

How do I add symbols to the screener? You can add symbols by opening the script settings and entering the desired tickers into the "Asset 01" through "Asset 40" fields in the Asset for Screening group.

Why does the screener show "Nothing Interesting"? This message appears when none of the symbols in your watchlist are currently meeting the overbought or oversold criteria defined in your settings.

How can I access the Screener - Mean Reversion Channel? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.