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.
5 | 0 % | |
4 | 100 % | |
3 | 0 % | |
2 | 0 % | |
1 | 0 % |
