The Adaptive Price Zone (APZ) is a technical indicator used to identify potential overbought and oversold conditions in the market. It was developed by Lee Leibfarth to adapt to changing market volatility, making it more responsive in dynamic trading environments.

APZ is composed of two bands surrounding a central price line. These bands adjust based on market volatility, widening during high volatility and narrowing when volatility is low. The distance of the bands from the central price line is determined by a volatility filter, often using the standard deviation of price over a certain period.

When the price moves above the upper band, it may signal overbought conditions, while movement below the lower band suggests oversold conditions. Traders use these signals to anticipate potential reversals or corrections in price.

The adaptive nature of APZ sets it apart from static indicators like the Bollinger Bands, making it more flexible in fast-changing markets. By identifying periods of extreme price movements, APZ helps traders make more informed decisions, whether it's to enter a trade or to adjust stop-loss levels, potentially increasing their trading accuracy.

The Adaptive Price Zone (APZ) is a technical indicator that helps traders identify potential overbought and oversold areas by adjusting to changing market volatility. It is built around a moving average, usually an exponential moving average (EMA), with upper and lower bands calculated using market volatility rather than fixed percentages. As volatility increases, the bands widen; when volatility decreases, they contract. This adaptive nature makes APZ more responsive than traditional indicators. Traders use the upper zone to spot possible selling or shorting opportunities and the lower zone to identify potential buying areas. When price moves outside the adaptive zone, it may signal a temporary extreme and a possible reversal or pullback. APZ works best when combined with trend analysis and other confirmation tools.