Description
Price Projection Dynamic ๐๐ฎ
https://chartshots.spotware.com/c/69d5304ea1cc1
What Is It?
https://chartshots.spotware.com/c/69d52fb4b01cd
Price Projection Dynamic is an overlay indicator that projects statistically probable future price paths using Monte Carlo simulation and evaluates directional bias through a Bayesian probability classifier. It answers one question: given how this asset has been moving, where is it statistically likely to go next? ๐
https://chartshots.spotware.com/c/69d53010d38ce
How It Works โ๏ธ
Engine 1 โ Monte Carlo Projection ๐ฒ
The indicator analyzes recent price history and extracts logarithmic returns. It calculates the average return and its standard deviation โ capturing both the asset's drift (tendency) and volatility (erratic movement) ๐ช๏ธ.
It runs 200 simulated price paths (up to 500) into the future. Each simulation is a "random walk" based on real recent action. From these, the indicator extracts 5 percentile bands:
Band
Meaning
95%
Optimistic extreme โ only 5% of simulations went higher ๐
75%
Upper probable range โ price ended above this in 25% of sims ๐
50% (MD)
Median projection โ the statistical center of all outcomes ๐ฏ
25%
Lower probable range โ price ended below this in 25% of sims ๐
05%
Pessimistic extreme โ only 5% of simulations went lower ๐๐
Pro Tip: The wider the fan opens, the higher the current volatility ๐ข. A tight fan means the asset is moving predictably ๐งต.
Engine 2 โ Bayesian Classifier ๐ง
Independent from the projection, this engine classifies the market as bullish or bearish by:
- Looking back over a window (default 500 bars) ๐.
- Measuring relative volume and momentum for bullish vs. bearish bars.
- Calculating which profile the current bar fits better using Gaussian probability โ๏ธ.
The result is a win probability percentage:
Probability
Interpretation
> 70%
High bullish confidence โ ๐ข
50โ70%
Moderate / unclear โ๏ธ๐ก
< 30%
High bearish confidence โ ๐ด
Visual Elements ๐จ
- Green lines (75%, 95%): Upper projection bands โ bullish range ๐
- White line (MD): Median projected price โ most probable path ๐
- Orange lines (25%, 05%): Lower projection bands โ bearish range ๐
- Dotted outer lines: 95% and 05% extremes (low probability boundaries) โ ๏ธ
- Solid inner lines: 75%, 50%, 25% (high probability zone) โ
- Price labels: Exact projected price for each percentile ๐ท๏ธ
- Info panel (top-right): Bayesian win probability, median target, relative volume, signal direction ๐ฅ๏ธ
How To Use ๐
- Read the fan shape ๐ข โ If it expands rapidly, volatility is high and projections are less certain.
- Use the median (MD) line ๐ฏ as the most statistically probable future price target.
- Use 75%/25% bands ๐ as realistic upper/lower targets for trades.
- Use 95%/05% bands ๐ as extreme boundaries โ useful for stop loss placement.
- Check the Bayesian panel ๐ง โ A probability above 70% or below 30% adds directional conviction.
- Combine both engines ๐ค โ If the median line slopes upward AND Bayesian probability is > 70%, the setup is statistically strong.
Key Parameters โ๏ธ
Parameter
What It Controls
Higher Value
Lower Value
Iterations
Number of simulated paths
Smoother bands ๐
Faster computation โก
Lookahead
Future projection distance
Longer horizon ๐ญ
Shorter, more reliable ๐
Sample Depth
Recent bars to analyze
Long-term behavior ๐ข
Recent behavior only ๐
Classifier Window
Bayesian history
Stabler probability โ๏ธ
More reactive โก
Indicator Profile ๐
- Indicator category: Statistics ๐
- Output type: Visualisation & Signals ๐ผ๏ธ
- Data requirements: Bars only ๐ถ
Disclaimer โ ๏ธ
This indicator projects statistical probabilities, not predictions ๐ฎ. Monte Carlo simulations assume the future will look like the recent past โ this breaks during black swan events ๐ฆข or news-driven gaps. Use as a probabilistic framework alongside your own risk management ๐ก๏ธ.
Summary
Separately, the Bayesian classifier evaluates market sentiment by analyzing relative volume and momentum over a configurable window, providing a win probability percentage that indicates bullish or bearish confidence. Visual elements include color-coded projection bands (green for bullish, orange for bearish), a median price line, price labels for each percentile, and an info panel displaying Bayesian probability and other metrics.
Key adjustable parameters include the number of simulation iterations, projection horizon, sample depth of historical bars, and classifier window size. The indicator requires bar data with volume and outputs visual projections and directional signals. It is designed to offer a probabilistic framework for anticipating price movement based on recent market behavior, suitable for various symbols including BTCUSD, EURUSD, GBPUSD, XAUUSD, NAS100, and others.
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