Probability Cones for Forward Price Dispersion

Summary

The indicator projects a mean path and up to three pairs of upper and lower deviation lines from a chosen chart anchor. It estimates deviations from a user-selected lookback using standard deviation, Laplace deviation, or absolute deviation, with average or median mean calculations. A drift option determines whether the mean’s changing value is carried forward, while the forecast horizon, line spacing, fills, and stepped display are configurable.

The anchor can be set by bars back, a selected date, or the start of a higher timeframe period. The script supports opening the cone at the anchor and can draw anchor lines to clarify the starting values. These are configurable visual projections based on historical data; the supplied material gives no performance results or empirical validation, and cautions that long projections can create visual errors. The cone should therefore be read as a dispersion visualization, not a guarantee that future prices will remain inside its bands.

Key ideas

• The indicator projects a mean and multiple deviation bands from a selected anchor.
• Deviation estimates can use standard, Laplace, or absolute methods.
• Mean choice and drift settings affect the projected center line.
• Anchoring can use a bar offset, a date, or a higher timeframe boundary.
• The projections summarize historical variation and do not validate future outcomes.

Tags

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