Matrix bands by Jaehee

Matrix Bands — multi-sigma EMA bands for price dispersion context (no signals)

📌 What it is
Matrix Bands draws an EMA-based central line with multiple standard-deviation envelopes at ±1σ, ±1.618σ, ±2σ, ±2.618σ, ±3σ.
Thin core lines show the precise band levels, while subtle outer “glow” lines improve readability without obscuring candles.

📌 How it works (concept)
Basis: EMA of the selected source (default: close)

Dispersion: Rolling sample standard deviation over the same length

Bands: Basis ± k·σ for k ∈ {1, 1.618, 2, 2.618, 3}

This is not a strategy and does not generate trade signals.
It provides price dispersion context only.

📌 Why these levels together (justification of the combination)
Using multiple σ layers reveals graduated risk zones in one view:

±1σ: routine fluctuation

±1.618σ & ±2σ: extended but still common excursions

±2.618σ & ±3σ: statistically rare extremes, where mean-reversion risk or trend acceleration risk increases

Combining these specific multipliers allows traders to judge positioning vs. volatility instantly, without switching between separate indicators or re-configuring a single band.

📌 How it differs from classic Bollinger Bands
Unlike classic Bollinger Bands, which typically use an SMA basis and only ±2σ envelopes,
Matrix Bands uses an EMA basis for faster trend responsiveness and plots five sigma levels (±1, ±1.618, ±2, ±2.618, ±3).
This design allows traders to visualize market dispersion across multiple statistical thresholds simultaneously, making it more versatile for both trend-following and mean-reversion contexts.

📌 How to read it (context, not signals)
Mean-reversion context: Moves beyond ±2σ may indicate stretched conditions; wait for your own confirmation signals before acting

Trend context: In strong trends, price can “ride” the outer bands; sustained closes near +2σ~+3σ (uptrend) or −2σ~−3σ (downtrend) suggest persistent momentum

Regime observation: Band width expands in high volatility and contracts in quiet regimes; adjust stops and sizing accordingly

📌 Inputs
BB Length: lookback period for EMA and σ (default: 20)

Source: price source for calculations

📌 Design notes
Thin inner lines = exact levels

Soft outer lines = readability “glow” only; no effect on calculations

Overlay display keeps the chart uncluttered

📌 Limitations & good practice
No entry/exit logic; use with your own strategy rules

Volatility interpretation varies by timeframe

Past patterns do not guarantee future outcomes; risk management is essential

📌 Defaults & scope
Works on any symbol with OHLCV

No alerts, no strategy results, no performance claims