Log Returns (Quant Lab)

Log Returns Indicator
This indicator calculates the logarithmic return of each bar using the formula:

logReturn = ln(Close / Close[1])

It then visualizes:
• A log-return histogram (green for positive, red for negative returns)
• A rolling mean of log returns (yellow line)
• ±1 standard deviation bands around the mean (orange lines)

This indicator is used to:
• Measure the true statistical return behavior of the asset
• Detect volatility expansions and contractions
• Identify abnormal return spikes (news, liquidation cascades, manipulation)
• Evaluate market efficiency and momentum strength
• Prepare quantitative features for machine learning models

In simple terms, the Log Returns indicator shows whether the asset’s recent price behavior is normal or statistically unusual.