The Price Deviation History is visual aid designed to provide a clear representation of how much a symbol's price deviates from its moving average, expressed in percentage terms.

You can use this tool to assess the difference between a symbol's current price and its moving average.

This indicator helps in identifying potential overbought or oversold conditions, trend strength, and price volatility.

By comparing the current price to its moving average, you can gain insights into market momentum and potential price reversals.

## Key Concepts

**Moving Average:**A moving average smooths out price data by creating a constantly updated average price over a specific period (e.g., 50 days, 200 days). It helps to highlight the underlying trend in price movements.**Deviation:**This refers to the difference between the current price and the moving average. It is typically expressed in percentage terms to provide a normalized measure of how far the price has diverged from the average.

## Key Features

**Deviation Calculation:**The tool calculates the deviation of a symbol's price from its moving average (e.g., 200-day simple moving average) in percentage terms.**Visual Representation:**It offers a graphical display, making it easy to see how the stock's price behaves relative to its moving average.**Customizable Parameters:**You can adjust the moving average period to suit their analysis needs (e.g., 5, 10, 20, 50, 100, 200).

## How It Works

**Data Input:** The tool pulls in price data and calculates the moving average based on the selected period (e.g., 200 days).

**Determine Current Price:** Note the current price of the symbol.

**Deviation Calculation:** It then computes the percentage deviation by comparing the current price to the moving average:

Deviation ( % ) = ( Current Price − Moving Average / Moving Average ) × 100

**Graphical Display:** The results are plotted on a graph, showing the deviation over time. This visual representation helps traders quickly assess the symbol's performance relative to its historical average.

## Interpretation

**Positive Deviation:**When the current price is*above*the moving average, the deviation is positive. A high positive deviation may indicate that the symbol is overbought.**Negative Deviation:**When the current price is*below*the moving average, the deviation is negative. A high negative deviation may suggest that the symbol is oversold.**Zero Deviation:**When the current price*equals*the moving average, the deviation is zero, indicating that the price is in line with its historical average.

## Example

Consider the EIR/USD currency pair with the following data:

- Current Exchange Rate: 1.10
- 200-Day Moving Average: 1.05

The deviation would be calculated as:

( 1.10 − 1.05 1.05 ) × 100 = 4.76 %

This 4.76% positive deviation indicates that EIR/USD is trading **above** its 200-day moving average.

## Practical Uses

**Trend Analysis**: It can be used to confirm the*strength*and*direction*of a trend. A strong upward deviation suggests a bullish trend, while a strong downward deviation indicates a bearish trend.**Overbought/Oversold Conditions**: Extreme deviations from the moving average can signal overbought or oversold conditions, and could seen as potential reversal points.**Volatility Assessment**: The magnitude of the deviation also provides insights into market volatility. Large deviations suggest higher volatility, while small deviations indicate stability.