Pattern Echo - Market Outcome ForecasterOVERVIEW
EchoEdge is a historical-analog research indicator that compares the current confirmed market environment with similar conditions previously observed on the same symbol and timeframe.
Rather than producing a conventional buy or sell signal, the indicator asks:
“What happened after this symbol previously displayed comparable technical conditions?”
It identifies independent historical matches, studies their subsequent price behavior, and summarizes those outcomes in an on-chart dashboard and forward projection.
METHODOLOGY
Each historical comparison uses a normalized collection of technical characteristics:
• 20-bar price momentum
• RSI
• ATR-based volatility
• Relative volume
• Distance from the 20-period EMA
• Position within the 52-week price range
• ADX trend strength
• Relative strength versus the selected benchmark
• EMA 20/50/200 trend alignment
• 20-period EMA slope
The script calculates a similarity score between the current confirmed market state and eligible historical observations.
Potential matches are ranked by similarity. A user-adjustable minimum separation prevents neighboring candles from the same historical event from being counted as multiple independent matches.
Historical observations without a completed forward evaluation period are excluded.
DASHBOARD
The dashboard displays:
• Analyzed candle — the confirmed candle being evaluated
• Best similarity — similarity of the closest historical match
• Average similarity — average across all accepted matches
• Independent matches — accepted matches meeting the similarity and spacing requirements
• Target reached first — percentage that reached the selected target before the stop
• Stop reached first — percentage that reached the selected stop before the target
• Neither reached — percentage that reached neither level during the evaluation period
• Median forward return — median closing return after the selected number of bars
• Median maximum upside — median highest favorable excursion
• Median maximum drawdown — median largest adverse excursion
• Entry, target and stop — reference levels derived from user-selected percentages
• Reward/risk — mathematical ratio between the selected target and stop distances
• Historical verdict — descriptive summary of the accepted historical outcomes
• Closest historical dates — dates of the three closest accepted matches
The verdict can be Favorable, Mixed, Unfavorable or Insufficient Matches. It summarizes the selected historical sample and is not a trading recommendation.
CHART COLORS
• Solid blue projection — median path followed by the accepted historical matches
• Dashed green projection — upper-quartile historical path
• Dashed red projection — lower-quartile historical path
• Green dotted horizontal line — user-defined target reference
• Red dotted horizontal line — user-defined stop reference
• Blue “DNA” labels — locations of the five closest historical analogs
• Green dashboard cells — comparatively favorable historical values
• Amber dashboard cells — mixed, intermediate or cautionary values
• Red dashboard cells — comparatively unfavorable historical values
• Gray dashboard cells — neutral, informational or unavailable values
The projected paths are distributions of historical outcomes. They are not forecasts of exact future prices and should not be interpreted as support, resistance or guaranteed destinations.
IMPORTANT LIMITATIONS
Historical similarity does not establish causation and does not ensure that future price behavior will resemble prior outcomes.
Results can vary substantially by symbol, timeframe, available history, benchmark, similarity threshold, forward period, target, stop and minimum match-separation settings.
Small samples may be statistically unreliable. A high similarity score means that the selected technical measurements were alike; it does not mean that the subsequent outcomes will also be alike.
Target-first and stop-first statistics use historical bar highs and lows. When both levels occur within the same candle, their actual intrabar order cannot be determined. The script therefore applies the conservative assumption that the stop occurred first.
The indicator uses standard OHLCV candles for its calculations, even when displayed on a synthetic chart type. When “Use last confirmed candle” is enabled, the current unconfirmed candle is excluded from the analysis.
This indicator does not account for commissions, slippage, bid/ask spreads, liquidity, taxes, news, earnings events or changes in market structure.
DISCLAIMER
EchoEdge is provided solely for educational, informational and historical research purposes. It is not financial, investment, legal or tax advice and does not constitute a recommendation or solicitation to buy or sell any security or financial instrument.
No result, projection, target, stop, similarity score, alert or historical verdict guarantees future performance. Users are responsible for conducting their own research, evaluating risk and determining whether any trade is appropriate for their circumstances.
Past performance and historical analogs are not reliable indicators of future results. Indicator
Indicator
Heat Map SeasonsHeat Map Seasons indicator
Indicator offers traders a unique perspective on market dynamics by visualizing seasonal trends and deviations from typical price behavior. By blending regression analysis with a color-coded heat map, this indicator highlights periods of heightened volatility and helps identify potential shifts in market sentiment.
Summer:
In the context of the indicator, "summer" represents a period of heightened volatility and upward price momentum in the market. This is analogous to the warmer months of the year when activities are typically more vibrant and energetic. During the "summer" phase indicated by the indicator, traders may observe strong bullish trends, increased trading volumes, and larger price movements. It suggests a favorable environment for bullish strategies, such as trend following or momentum trading. However, traders should exercise caution as heightened volatility can also lead to increased risk and potential drawdowns.
Winter:
Conversely, "winter" signifies a period of decreased volatility and potentially sideways or bearish price action in the market. Similar to the colder months of the year when activities tend to slow down, the "winter" phase in the indicator suggests a quieter market environment with subdued price movements and lower trading volumes. During this phase, traders may encounter choppy price action, consolidation patterns, or even downtrends. It indicates a challenging environment for trend-following strategies and may require a more cautious approach, such as range-bound or mean-reversion trading strategies.
In summary, the "summer" and "winter" phases in the "Heat Map Seasons" indicator provide traders with valuable insights into the prevailing market sentiment and can help inform their trading decisions based on the observed levels of volatility and price momentum.
How to Use:
Watch for price bars that deviate significantly from the regression line , as these may signal potential trading opportunities.
Use the seasonal gauge to gauge the current market sentiment and adjust trading strategies accordingly.
Experiment with different settings for Length and Heat Sensitivity to customize the indicator to your trading style and preferences.
The "Heat Map Seasons" indicator can potentially identify overheated market tops and bottoms on a weekly timeframe by detecting significant deviations from the regression line and observing extreme color gradients in the heat map. Here's how it can be used for this purpose:
Observing Extreme Color Gradients:
When the market is overheated and reaches a potential top, you may observe extremely warm colors (e.g., deep red) in the heat map section of the indicator.
Traders can interpret this as a warning sign of a potential market top, indicating that bullish momentum may be reaching unsustainable levels.
Conversely, when prices deviate too far below the regression line, it may indicate oversold conditions and a potential bottom.
Potential Tops and Bottoms:
User Inputs:
Length: Determines the length of the regression analysis period.
Heat Sensitivity: Controls the sensitivity of the heat map to deviations from the regression line.
Show Regression Line: Option to display or hide the regression line on the chart
Note: This indicator is best used in conjunction with other technical analysis tools and should not be relied upon as the sole basis for trading decisions. Indicator
MZ Adaptive Ichimoku Cloud (Volume, Volatility, Chikou Filter) This study is a functional enhancement to conventionally used Ichimoku Clouds . It uses particular effective adaptive parameters (Relative Volume Strength Index (MZ RVSI ), Volatility and Chikou Backward Trend Filter) to adapt dynamic lengths for Kijun-sen, Tenkan-sen, Senkou-span and Chikou .
This study uses complete available Ichimoku Clouds trading methodology to provide trade confirmations. Its still in experimental phase so will be updated accordingly.
ADAPTIVE LENGTH PARAMETERS
Relative Volume Strength Index (MZ RVSI )
For adaptive length, I tried using Volume and for this purpose I used my Relative Volume Strength Index " RVSI " indicator. RVSI is the best way to detect if Volume is going for a breakout or not and based on that indication length changes.
RVSI breaking above provided value would indicate Volume breakout and hence dynamic length would accordingly make Ichimoku Clouds more over-fitted to better act as support and resistance . Similar case would happen if Volume goes down and dynamic length becomes more under-fit.
Original RVSI Library and study can be found here:
Volatility
Average true range is used as volatility measurement and detection tool. Dual ATR condition would decide over-fitting or under-fitting of curve.
Chikou Backward Trend Filter
Chikou is basically close value of ticker offset to close and it is a good for indicating if close value has crossed potential Support/Resistance zone from past. Chikou is usually used with 26 period.
Chikou filter uses a lookback length calculated from provided lookback percentage and checks if trend was bullish or bearish within that lookback period.
Original Chikou Filter library and study can be found here:
ADAPTIVE ICHIMOKU CLOUD
Tenkan-Sen (Conversion Line)
Tenkan-sen is a moving average that is calculated by taking the average of the high and the low for the last nine periods conventionally but in this study its length is dynamically adapted based on Volume, Volatility and Chikou filter. Default adaption range is set to 9-30 which I found universally applicable to almost every market on all time-frames.
Kijun-Sen (Base Line)
The Kijun-Sen is usually considered a support/resistance line which also acts as an indicator of price movements in the future and takes a longer period into consideration, usually 26 periods compared to Tenkan-Sen’s nine periods is used conventionally. In this study, its length is set to vary in range of 20-60 based on adaptive parameters.
Senkou-Span (Leading Span)
Senkou-Span A : Senkou Span A is the average of the highs and lows of Tenkan-Sen and Kijun-Sen so it automatically adapts accroding to dynamic lengths of Tenkan and Kijun.
Senkou-Span B : Senkou Span B is usually calculated by averaging highs and lows of the past 52 periods and plotting it 26 points to the right but this study uses adaptive parameters to adapt its dynamic length in range of 50-120 which makes Kumo (Ichimoku Cloud) a better area for support and resistance. I don’t consider its necessary to adapt Kumo’s displacement to the right, so I used conventional 26 period as offset.
Chikou -Span (Lagging Span)
The Chikou Span, also known as the lagging span is formed by taking the price source and offsetting it back 26 periods to the left but I used adaptive length in range 26-50 which makes this tool a better option to check for Chikou -Price cross check in wide range.
TRADE SIGNALS & CONFIRMATIONS
Volume : RVSI used to detect volume breakout about given point. By default, On Balance Volume based RVSI is selected for all dynamic length adaption and also for trade confirmations.
Cross(Tenkan,Kijun) : Easiest way to detect trend as if Tenkan is above Kijun then market is uptrend and vice versa.
Volatility : High volatility is a good way to confirm if price is on the move or not.
Tenkan = Kijun : Because of a wide range of Tenkan and Kijun length; their value can become equal before reversal.
Chikou > Source : A very conventional way to detect price momentum as if Chikou is above price then market is in uptrend and vice versa.
Chikou Momentum : Another simpler way to represent Chikou > Source as if momentum of price source is uptrend then price will tend to follow.
Source > Kumo : Using the best tool of Ichimoku Clouds i.e. Kumo. If price crosses both Senkou-Span A & B then market has broken potential resistance leading to a good uptrend and vice versa.
Source > Tenkan : Better way to detect price trend in short term.
Chikou Backward Trend Filter : Different from Chikou >Source in a way that Chikou filter makes sure that price crosses highest/lowest within defined period.
CHARTING
Bars Coloring : Bars coloring is set as following :
src > tenkan-Sen and src > kijun-Sen : Strong uptrend detection and shown by green bars.
src < tenkan-Sen and src < kijun-Sen : Strong downtrend detection and shown by green bars.
src > tenkan-Sen and src < kijun-Sen : Better way to detect bottom reversals as if price comes above tenkan but remains below kijun; that’s early signs of recovery. Light red bars are used for this by default.
src < tenkan-Sen and src > kijun-Sen : Better way to detect top reversals as if price comes below tenkan but remains above kijun; that’s early signs of losing potential in uptrend. Dark Grey bars are used for this by default.
Kumo Coloring : Following steps are used to derive Kumo’s dynamic color:
Average of Senkou-span A and B is calculated.
RSI with 14 period of that average is calculated.
Gradient color based on calculated RSI values with 0-100 range is derived which is final Kumo color.
Chikou Span Coloring : Dynamic coloring from Chikou Filter is used as Indicator’s Chikou ’s color.
Signals Overlay : Red and Green small triangles are used as signals overlay.
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