Estimating Next-Candle Direction by Moving-Average Deviation

Summary

This indicator measures the close’s percentage distance above or below a selected moving average, rounds the absolute deviation to a whole percentage, and groups historical observations by side and deviation. It supports several moving-average types and lets users set the averaging period and a minimum occurrence count. A chart table reports the current deviation, the contributing sample count, and the observed proportions of green and red next candles.

To build the estimate, the tool expands the sample from the current rounded deviation to larger deviations on the same side until the occurrence threshold is reached or available history runs out. This trades specificity for a larger sample, so the displayed probability may combine meaningfully different market conditions. The document provides illustrative examples, not independently validated results. These are historical conditional frequencies, not forecasts with guaranteed reliability; they may vary by asset, timeframe, and available history, and sparse samples can weaken interpretation.

Key ideas

• The indicator bins historical closes by rounded percentage deviation from a configurable moving average.
• It separates observations above the average from those below it and counts the following candle’s direction.
• When the current deviation has too few occurrences, the tool includes larger deviations on the same side to build its sample.
• The table displays the current deviation, sample count, and historical green and red proportions.
• The estimates are descriptive historical frequencies and may not predict future outcomes.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.