A trading indicator that calculates probabilities of bullish and bearish candles using moving averages, helping traders understand market trends and potential price movements.
Explore complementary indicator rolesHow it works
The indicator analyzes market trends by calculating three moving averages: a 7-period EMA, 20-period SMA, and 200-period SMA. It determines the market trend by comparing these moving averages, classifying it as bullish or bearish based on their relative positions.
The script then examines the last 'n' candles in the lookback period, counting the number of bullish and bearish candles. It calculates the probability percentages by dividing the number of green or red candles by the total lookback period and multiplying by 100.
Why it may be useful
This indicator provides traders with a statistical approach to understanding market behavior by quantifying the likelihood of bullish or bearish candles. It transforms subjective market observations into objective probabilities, allowing traders to make more informed decisions based on recent price action.
By displaying the current trend and candle probabilities, the indicator helps traders assess market sentiment and potential future movements. It offers a data-driven perspective that can complement other technical analysis tools and reduce emotional decision-making in trading.
When to explore it
The candle probability indicator is most effective in markets with clear trending characteristics, where moving averages can reliably identify bullish or bearish conditions. It works well across different timeframes and can be particularly useful for traders seeking to understand short-term market dynamics.
Traders should use this indicator in conjunction with other technical analysis tools to confirm signals and validate trading decisions. It is especially valuable during periods of market uncertainty, helping traders gauge the statistical probability of potential price movements.
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What we’ve verified
Access, alerts and repainting behaviour have not been independently verified for this indicator. Check the creator’s current publication and settings.
General descriptions and classifications are recovered research. Verified details above identify the specific checks we have completed. Check the creator’s current publication for later changes.
