Bias Indicator Explained

The Bias indicator is the percentage gap between price and its own moving average: +2 means price trades 2% above its mean. It quantifies the single oldest intuition in trading — price stretched too far from its average tends to snap back.

How It Works

• ((Close − SMA(N)) / SMA(N)) × 100.
• Positive = extended above the mean; negative = below.
• Each market has characteristic bias extremes that repeat.

How to Trade It

Map your market's historical bias extremes, then fade beyond them in ranges or use them as take-profit zones in trends (a trend entry that reaches +2σ of historical bias has done its job). Bias near zero after a trend marks reset conditions for the next leg.

Building It in Setup.Cash

Add Bias in the strategy builder — the length input controls its sensitivity — and use its value in any entry, exit, or filter condition. You can also combine it with other tools in the Indicators Lab or via the AI indicator generator. See Z-Score for the volatility-normalized version of the same distance. For the full category overview, see the advanced momentum library guide.

Momentum signals are timing tools — combine them with a trend or regime filter and backtest the exact rules before going live.