OPEN-SOURCE SCRIPT
PLR-Z For Loop
🧠 Overview
PLR-Z For Loop is a trend-following indicator built on the Power Law Residual Z-score model of Bitcoin price behavior. By measuring how far price deviates from a long-term power law regression and applying a custom scoring loop, this tool identifies consistent directional pressure in market structure. Designed for BTC, this indicator helps traders align with macro trends.
🧩 Key Features
🔍 How It Works
Power Law Curve: Price is compared against a logarithmic regression model fitted to historical BTC price evolution (starting July 2010), defining structural support, resistance, and centerline levels.
Residual Z-Score: The residual is calculated as the log-difference between price and the power law center.
This residual is then normalized using a rolling mean (400 days) and standard deviation (1460 days) to create a long-term Z-score.
Loop Scoring Logic:
Smoothing Option: A user-defined EMA smooths the score, if enabled, to reduce short-term signal noise.
Signal Logic:
Directional State (CD): Internally manages the current market regime (1 = long, -1 = short), controlling all visual output.
🔁 Use Cases & Applications
✅ Conclusion
PLR-Z For Loop reframes Bitcoin’s long-term power law model into a trend-following tool by scoring the persistence of deviations above or below fair value. It shifts the focus from valuation-based mean reversion to directional momentum, making it a valuable signal for traders seeking high-conviction participation in BTC’s broader market cycles.
⚠️ Disclaimer
The content provided by this indicator is for educational and informational purposes only. Nothing herein constitutes financial or investment advice. Trading and investing involve risk, including the potential loss of capital. Always backtest and apply risk management suited to your strategy.
PLR-Z For Loop is a trend-following indicator built on the Power Law Residual Z-score model of Bitcoin price behavior. By measuring how far price deviates from a long-term power law regression and applying a custom scoring loop, this tool identifies consistent directional pressure in market structure. Designed for BTC, this indicator helps traders align with macro trends.
🧩 Key Features
- Power Law Residual Model: Tracks deviations of BTC price from its long-term logarithmic growth curve.
- Z-Score Normalization: Applies long-horizon statistical normalization (400/1460 bars) to smooth residual deviations into a usable trend signal.
- Loop-Based Trend Filter: Iteratively scores how often the current Z-score exceeds prior values, emphasizing trend persistence over volatility.
- Optional Smoothing: Toggleable exponential smoothing helps filter noise in choppier market conditions.
- Directional Regime Coloring: Aqua (bullish) and Red (bearish) visuals reinforce trend alignment across plots and candles.
🔍 How It Works
Power Law Curve: Price is compared against a logarithmic regression model fitted to historical BTC price evolution (starting July 2010), defining structural support, resistance, and centerline levels.
Residual Z-Score: The residual is calculated as the log-difference between price and the power law center.
This residual is then normalized using a rolling mean (400 days) and standard deviation (1460 days) to create a long-term Z-score.
Loop Scoring Logic:
- A loop compares the current Z-score to a configurable number of past bars.
- Each higher comparison adds +1, and each lower one subtracts -1.
- The result is a trend persistence score (z_loop) that grows with consistent directional momentum.
Smoothing Option: A user-defined EMA smooths the score, if enabled, to reduce short-term signal noise.
Signal Logic:
- Long signal when trend score exceeds long_threshold.
- Short signal when score drops below short_threshold.
Directional State (CD): Internally manages the current market regime (1 = long, -1 = short), controlling all visual output.
🔁 Use Cases & Applications
- Macro Trend Alignment: Ideal for traders and analysts tracking Bitcoin’s structural momentum over long timeframes.
- Trend Persistence Filter: Helps confirm whether the current move is part of a sustained trend or short-lived volatility.
- Best Suited for BTC: Built specifically on the BNC BLX price history and Bitcoin’s power law behavior. Not designed for use with other assets.
✅ Conclusion
PLR-Z For Loop reframes Bitcoin’s long-term power law model into a trend-following tool by scoring the persistence of deviations above or below fair value. It shifts the focus from valuation-based mean reversion to directional momentum, making it a valuable signal for traders seeking high-conviction participation in BTC’s broader market cycles.
⚠️ Disclaimer
The content provided by this indicator is for educational and informational purposes only. Nothing herein constitutes financial or investment advice. Trading and investing involve risk, including the potential loss of capital. Always backtest and apply risk management suited to your strategy.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.