MTF Fractal Bias Confluence Detector

前天

MTF Fractal Bias Confluence Detector

This indicator, the MTF Fractal Bias Confluence Detector, is based on the idea that the market exhibits fractal behaviour. The origin of the idea traces back to 1963, when Benoit Mandelbrot analyzed the fluctuations in cotton prices over a time series starting in 1900, discovering that price changes exhibited scale-invariant patterns. This means that the curve representing daily price changes mirrored the shape of monthly price changes, highlighting the fractal nature of market behaviour. When applied to swing points across multiple timeframes (MTF), this concept suggests that swing points demonstrate similar patterns regardless of the timeframe being analyzed. These self-similar fractal structures provide traders with insights into market reversals and trends, making them a powerful tool for multi-timeframe analysis.

A Swing Point is made up of three main parts: a move away from the last Break level; forming a peak (pivot point) with a Fakeout of the peak (explained through an example later); and a subsequent move away from it. These swing points recur across all timeframes as part of cyclical momentum patterns, meaning each swing point gives rise to a new cycle of market movement. Due to the fractal nature of the market, larger cycles encompass multiple smaller ones.

The theory behind the Fractal Bias Confluence Detector utilizes the idea that the market movements are fractal in nature and illustrates how such swing points can be identified across MTFs. To do so, we examine the Peak Fakeouts within these cycles, as they form. It is not possible to know in advance how long each of these moves will last, but a Swing Point will often occur with a Peak Fakeout. Therefore, the most critical element is to identify the Peak Fakeout.

The snapshot below captures a Peak Fakeout, as discussed earlier.



Similarly, the following snapshot shows various possible breakdowns of Higher Time Frame (HTF) cycles into smaller Lower Time Frame (LTF) movements. The chart contains a white table(not part of the indicator and shown for illustration purposes only).



To further illustrate. Consider the combination of Time Frames (TF) from the 2nd row (from the above snapshot). Cycle TF (1M), Setup TF (1W), Momentum TF (1D) etc.

Price movements in the 1M TF highlight the direction in which HTF traders are pushing the market. Often, when markets have broken out of a level, they tend to form a peak and can then pull back towards the prior breakout level. Once the pullback is beyond the last breakout level, in the opposite direction, we may say the peak formation is created, and directional bias has changed. This is also called Peak Fakeout. Due to the fractal nature of the market, Swing Points on the HTF will often constitute multiple Swing Points on the LTF, though they are not always in sync. However, after such peak formation, there is a high probability that the price might move away from the peak for at least 1 candle (in the cycle TF). This theory illustrates that once a new cycle is in play, we can then look at 1W (Setup TF) to look for possible in-sync movements, at least within that 1 candle of the HTF. Repeating the same for further lower TFs, we may arrive at a confluence of Fractal Bias and see how the movements in LTF are driven by the HTF momentum.

Another example within the chart:



Note: The above examples are just for illustration purposes, and other permutations and combinations of movements across multiple TFs are also possible.

This indicator aims to help users identify such fractal-bias-confluences, so that they can leverage the fractal nature of the market to get a holistic view. To do so, the indicator displays how the market has moved across multiple time frames, with respect to different historical levels.

Features:

1. The bias summary table

The following snapshot depicts the bias summary table at the bottom right of the chart.



1.1. Workings: The table will display, for various TFs, in the first four (starting from "current" to Prev[3]) rows, one of the following.

"F/H" , " Acronym for the failed break of the previous high",
"F/L" , " Acronym for the failed break of the previous low",
"B/H" , " Acronym for the break of the previous high",
"B/L" , " Acronym for the break of the previous low",
"IN" , " Acronym for an inside candle (never broke high or low of perv candle)",
"OT" , " Acronym for an outside candle (broke both high and low of previous candle and closing price is in between previous high and low)".

Note: these acronyms are customizable according to the user's choice of terminology in any language, as shown in the snapshot below.


1.1.1 In the above snapshot, the 1st row, called "Current", shows how the current candle is evolving with respect to the previous one. The "previous" row shows how the previous candle closed with respect to the pre-previous one. The next two rows represent the bias of the pre-previous and pre-pre-previous in a similar manner. By default, the bias is updated in real-time, even for the already closed historical candles. For example, if the previous 4H candle closed as a B/H and the current price then comes below the pre-previous 4H candle high, then the bias of the previous candle will get updated to F/H. This informs the user that the break above the pre-previous high has failed. However, the user has the option to turn this off. The information in these four rows shows the user how the market is moving currently and how it evolved before reaching the current price levels.

Note: The calculation done by the indicator is to keep track of how the price is moving with respect to the last candle levels in real-time. This means if the price first goes above the previous high and then goes below the previous low, the indicator is equipped to display what happened in the most recent time. The snapshot below shows the option to turn on/off such updates in the bias summary table.



Note: While the bias summary table is turned on, the user also has the option to turn off Prev[2] and Prev[3] rows, as shown in the snapshot below.



1.1.2 The 2nd to last row, called CL/CS(Consecutive Long/Short), shows whether consecutive (2+) breaks of high/low happened or not in one direction without taking out the previous candle's range in the opposite direction. When conditions are met, it will show the number of times the price has been pushed in one direction (in the above manner), followed by "L" for long and "S" for short, for each TF, for example, "4L". It gets updated in real-time for each push in the same direction. Furthermore, a good analogy of "4L" on an HTF is 4 consecutive Break of Structure (BOS) (in the same direction) on LTF, without a Change of Character (CHoCH). Another example would be Stacey Burke's 3 consecutive rises that can be mapped in the indicator, if the conditions are met for "3L" for a given TF.

1.1.3 The last row, FRC/FGC, stands for the first red/green candle. It shows whether the last candle of a TF has closed as green (i.e., close>open) after posting two red candles (i.e., close<open). This helps understand possible short-term retracements in price movements.

1.2 Customizability

1.2.1 We provide a wide range of customizable options, including multiple time frames to choose from for each type of TFs. This is shown in the snapshot below.


1.2.2 All the acronyms on the summary table are customizable and can be user-defined, including text, background color and transparency. This is shown in the snapshot below.


2. High-low lines

2.1 We also show the high and low of various TFs, including the current high and low lines (which are updated in real-time. This can be observed in one of the previous snapshots.

2.2 Previous high, low and close lines can be extended (for Cycles, Setups and Momentum TFs). Their style and thickness are also customizable. This can be observed in one of the previous snapshots.

Note: The user has the option to turn all the lines off. Sub-options include turning off the current line only. Changing the color, thickness, and transparency of the lines. This can be observed in one of the previous snapshots.

3. Last known Break / Failed Break lines.

3.1 We also depict the last known Break and Failed break lines for the user to have all the important levels at their disposal. This can be observed in one of the previous snapshots.

Note: The user has the option to turn this on/off.

4. Magnifier Box

4.1 We have provided the user to look at thirty 1m candles inside a magnifier box while they are in a higher TF chart.

The user has the option to turn this on/off.

5. Moving Averages (MA)

We have also grouped some built-in MA options for the user to utilize along with other elements of the indicator to help them get another layer of confluence.
The user has the option to turn this on/off.

Disclaimer:

The indicator leverages pre-existing theories of market movements. These can be found in decades-old published materials (like books, journals, public lectures accessible over popular video-sharing websites, etc.). As such, we do not claim to have any exclusive rights over the underlying theories. There are many analogous theories and nomenclatures that users can map onto this indicator. Users may also use the indicator in combination with other indicators.

1. Educational Use Only

The "MTF Fractal Bias Confluence Detector" is provided for educational purposes only. It does not constitute an offer, or an obligation, or a guarantee, of profitable trades or loss prevention.

2. No Financial Advice
This tool should not be viewed as financial advice for either trading or investment(s).

3. User Responsibility
Users alone bear all risks associated with any decisions they make using this tool. Past performance does not guarantee future results.

By using the "MTF Fractal Bias Confluence Detector," you acknowledge that you have read, understood and accepted this disclaimer in its entirety.

前天

發行說明

Minor language change in the settings panel, as shown below.

前天

發行說明

Minor language change and rearrangement of options in settings.

昨天

發行說明

Update v1.1

1. We have added another method of real time bias update for the previously closed candles.

The user will now have two options to choose from in the settings panel as shown in the snapshot below.



Workings of the option (v1) is shown in the snapshot below.



Here, the bias of Prev[2] gets updated from B/L to F/L once the current price goes above Prev[3]'s low, irrespective of the fact that whether the current price is also above Prev[3]'s
high. This option will only update bias based on the fact that whether the level corresponding to the closing bias is remade or broken.

Workings of the option (v2) is shown in the snapshot below.



Here, the bias of Prev[2] gets updated from B/L to F/L once the current price goes above Prev[3]'s low. Further if the current price then goes above Prev[3]'s high, the bias of Prev[2] gets updated to B/H. The logic behind adding this option is to give the user more information about which are the nearest Break/Failed-break levels. These levels can then be interpreted as nearest support/resistances etc. We don't update the bias if the previous candle's closing bias was IN, as it didn't break any previous levels to form a new high or low.

2. We have given a minor update to the OHLC calculation method.

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Gerneral Limitations:

*For all input TFs, the indicator should calculate elements properly while the chart TF is set to 10 minutes and above.

*For input TFs set to D and below, the indicator should calculate elements properly while the chart TF is set to 1 minute and above.

*For input TF set to W, the indicator may show erroneous outputs when chart TF is set to below 2 minutes.

*For input TFs set to M/12M, the indicator may show erroneous outputs when chart TF is set to below 10 minutes.

*Chart TF must be less than all the user defined input TFs else the indicator may show erroneous outputs.