By Islam BarakaDefinitions
In plain terms
It expresses high-to-high mismatch as a scale-aware fraction.
Technical
spread = (max(test_prices)-min(test_prices))/mean(test_prices); the canonical double-top limit is <= 0.025.
Scope
A tolerance is a package choice, not a universal definition of visual similarity.
Formula
spread=(max(test_prices)-min(test_prices))/mean(test_prices)s=\frac{\max_j p_j-\min_j p_j}{\bar p}| Symbol | Meaning | Unit |
|---|---|---|
p_j | comparable test price | price |
Output unit: fraction
Examples
- A reviewer computes Normalized Level Spread on a deterministic close fixture and checks pivot timing, threshold equality, neckline behavior, and rejection diagnostics before publication.
Common misconceptions
- A tolerance is a package choice, not a universal definition of visual similarity.
Concept relationships
Where this concept is used
Evidence and governance
- Foundations of Technical Analysis: Computational Algorithms, Statistical Inference, and Empirical Implementation Lo, Mamaysky, and Wang · first party technical publication
Supports: preferred label, short definition, technical definition, formula
Limits: The paper's smoothing, sample, and empirical design are not copied into this package and do not validate its thresholds.
- Pine Script repainting concepts TradingView · official platform documentation
Supports: preferred label, short definition, technical definition, formula
Limits: Platform display behavior does not establish financial usefulness or predictive value.
- scipy.signal.find_peaks SciPy · first party technical publication
Supports: preferred label, short definition, technical definition, formula
Limits: This retrospective signal function is not itself a causal OHLC pivot detector.
- Pine Script pivot techniques TradingView · official platform documentation
Supports: preferred label, short definition, technical definition, formula
Limits: The package freezes its own equality, separation, and OHLC policies rather than claiming one universal pivot definition.
- Zig Zag indicator QuantConnect · official platform documentation
Supports: preferred label, short definition, technical definition, formula
Limits: This package selects a close-only percentage-reversal variant and documents the difference.
- LEAN ZigZag source QuantConnect · first party technical publication
Supports: preferred label, short definition, technical definition, formula
Limits: A maintained implementation is evidence for one convention, not a universal market rule.
- Reviewed by
- fintech-builder-batch-012
- Last reviewed
- 2026-08-10
- Next review
- 2027-08-10
- Record status
- evidence reviewed
This record is evidence-reviewed and readable, but not yet promoted to published — it is served noindex,follow and excluded from the sitemap.