Mean Absolute Error | Lyro RS

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Overview
This indicator is a closed-source, invite-only analytical framework built around Mean Absolute Error as a way to measure market dispersion, pressure, and structural imbalance. Instead of treating price movement purely as direction or momentum, it evaluates how far price deviates from its evolving reference state and converts that deviation into actionable contextual signals. The indicator is modular by design, allowing traders to analyze continuation, strength, and valuation through multiple coordinated modes without switching tools.



Originality
The originality of this indicator comes from how Mean Absolute Error is used as a core market metric rather than a secondary statistical output. MAE is not treated as a passive volatility measure; it becomes an active signal driver that adapts to trend persistence, internal strength, and exhaustion. By combining MAE-weighted price behavior, directional counting logic, and stochastic normalization, the script creates a multi-perspective model that differs fundamentally from traditional volatility bands, oscillators, or momentum indicators.

Modes
The indicator operates through three distinct modes, each producing signals using a different interpretation of MAE-based behavior:

• Cloud mode
  Signals are generated when price expands beyond adaptive MAE-derived envelopes, highlighting directional continuation and structural break conditions.
  
  
• For Loop mode
  Signals are generated by evaluating directional dominance over a configurable historical window, focusing on sustained pressure rather than single-bar events.
  
  
• StochTrend mode
  Signals are generated through a normalized trend oscillator built from MAE-weighted price, emphasizing trend alignment, valuation zones, and divergence behavior.
  

Methodology
The script is built around the concept that meaningful market information is found in how price deviates from its own adaptive baseline, not simply in price direction alone. To achieve this, the indicator constructs internal reference structures and evaluates price behavior relative to them across multiple layers.

The core framework can be understood through the following conceptual components:

• An adaptive benchmark that represents the evolving reference state of price using selectable smoothing models.
  
• A Mean Absolute Error engine that measures average deviation from the benchmark and scales dynamically with market conditions.
  
• A directional persistence model that evaluates how consistently price favors one side of its historical range over time.
  
• A normalization layer that converts MAE-weighted behavior into bounded trend and valuation signals.
  
• A state-based visualization system that reflects regime changes, strength shifts, and imbalance conditions rather than isolated signals.
  

Traders interact with the indicator by selecting a mode that aligns with their objective. Cloud mode is typically used to frame continuation and expansion phases, For Loop mode emphasizes internal strength and dominance, and StochTrend mode focuses on trend alignment, valuation extremes, and divergence context. The indicator is intended to be read as a state model, where color, position, and transitions matter more than any single plotted value.

Why this works
This methodology works because it evaluates price action relative to its own adaptive error structure, allowing the indicator to remain context-aware across changing volatility and regime conditions.

Summary
This protected, invite-only indicator provides a structured and original approach to market analysis by transforming Mean Absolute Error into a multi-functional analytical engine. Through its modular modes, traders can assess continuation, internal strength, trend alignment, valuation extremes, and divergence within one coherent framework. The script emphasizes contextual interpretation and regime awareness while intentionally abstracting its internal mechanics.

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

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