OPEN-SOURCE SCRIPT
Normalized Market Indicators
Explanation of the Code:
Data Retrieval: The script retrieves the closing prices of the S&P 500 (sp500) and VIX (vix).
Normalization: The script normalizes these values using a simple z-score normalization (subtracting the 50-period simple moving average and dividing by the 50-period standard deviation). This makes the scales of the two datasets more comparable.
Plotting with Secondary Axis: The normalized values of the S&P 500 and VIX are plotted on the same chart. They will share the same y-axis scale as the main chart (e.g. Netflix, GOLD, Forex).
Points to Note:
Normalization Method: The method of normalization (z-score in this case) is a choice and can be adjusted based on your needs. The idea is to bring the data to a comparable scale.
Timeframe and Symbol Codes: Ensure the timeframe and symbol codes are appropriate for your data source and trading strategy.
Overlaying on Price Chart: Since these values are normalized and plotted on a seperate chart, they won't directly correspond to the price levels of the main chart (e.g. Netflix, GOLD, Forex).
Data Retrieval: The script retrieves the closing prices of the S&P 500 (sp500) and VIX (vix).
Normalization: The script normalizes these values using a simple z-score normalization (subtracting the 50-period simple moving average and dividing by the 50-period standard deviation). This makes the scales of the two datasets more comparable.
Plotting with Secondary Axis: The normalized values of the S&P 500 and VIX are plotted on the same chart. They will share the same y-axis scale as the main chart (e.g. Netflix, GOLD, Forex).
Points to Note:
Normalization Method: The method of normalization (z-score in this case) is a choice and can be adjusted based on your needs. The idea is to bring the data to a comparable scale.
Timeframe and Symbol Codes: Ensure the timeframe and symbol codes are appropriate for your data source and trading strategy.
Overlaying on Price Chart: Since these values are normalized and plotted on a seperate chart, they won't directly correspond to the price levels of the main chart (e.g. Netflix, GOLD, Forex).
Open-source script
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in publication is governed by House rules. You can favorite it to use it on a chart.
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