Root Deviation Loop | Lyro RS

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The Root Deviation Loop indicator is a multi-mode trend signal tool that detects price momentum and breakout conditions using Root Mean Square Deviation (RMSD) instead of standard deviation. It provides a flexible framework for analyzing market conditions through three distinct signal generation methods: Bollinger Band-style deviation, a loop-based scoring system, and a hybrid combined signal. These modes help highlight trend continuation or reversal zones with a focus on smoothing out noise and avoiding extreme outlier effects.

Indicator Modes

1. Bollinger-Style RMSD Bands
   This mode plots upper and lower volatility bands using RMSD around a selected moving average. RMSD is used instead of standard deviation for a more stable measurement of price dispersion. The formula for the bands is:
   
   Upper Band = Moving Average + (RMSD × Multiplier)
   Lower Band = Moving Average − (RMSD × Multiplier)
   
   The bands dynamically expand and contract based on market volatility. Crossovers above or below these bands are used to signal trend shifts or breakouts.
   
   
2. For-Loop Momentum Scoring
   This mode calculates a loop-based trend score by comparing the RMSD-weighted source to its historical values within a defined range. The loop evaluates the directional bias of price changes:
   If the current value is greater than past values, it adds to the score.
   If it is lower, it subtracts from the score.
   This produces a net momentum score used to determine bullish or bearish dominance.
   RMSD Weighted Source = (Price × RMSD) / RMSD
   Score = Sum over loop: (src > src) ? +1 : -1
   
3. Combined Signal
   This mode merges the outputs of the Bollinger RMSD and For-Loop modes. It averages both signals into a single composite score. A long or short signal is generated based on whether the combined score crosses above or below user-defined thresholds.
   

Signal Interpretation
In the Bollinger Bands mode, signals are generated based on price interaction with the RMSD bands:

• A long signal occurs when price crosses above the upper RMSD band
  
• A short signal occurs when price crosses below the lower RMSD band
  
• No signal is produced when price remains between bands
  

These signals suggest potential breakout points when price momentum exceeds recent volatility-defined boundaries.

⚠️Disclaimer
This indicator is a technical analysis tool and does not guarantee results. It should be used in conjunction with additional analysis methods and proper risk management strategies. The creators of this indicator are not responsible for any financial decisions made based on its signals.

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