The STE function in ProBuilder language calculates the standard error of a time series over a specified number of periods for a given price. This statistical function is used to measure the accuracy with which a sample represents a population based on the standard deviation and sample size. In the context of financial markets, the standard error helps to determine how closely prices are to the linear regression line, thereby indicating the reliability of the trend.

Syntax:

STE[N](price)

Where N is the number of periods over which the standard error is calculated, and price refers to the price series (e.g., close, open, high, low).

Example:

myseries = close
statisticalerror = STE[10](myseries)
RETURN statisticalerror

In this example, the standard error of the closing price over the last 10 periods is calculated and returned. This value can be used to assess the deviation of prices from the trend line.

Additional Information:

• The STE function is often used in conjunction with the R² (coefficient of determination) to evaluate the strength and reliability of a trend. A lower standard error in relation to a high R² value suggests a strong and reliable trend.
• When the values of STE and R² converge from opposite directions, it often signals a potential change in trend, which could be a new phase of consolidation or a reversal.

This function is particularly useful for traders and analysts looking to understand the volatility and reliability of price movements in relation to their fitting to a regression model.