Next Candle Probability (EB, EWMA, Regime)

Purpose

This indicator provides a quantitative assist to day traders by estimating the probability that the next candle will close green or red.
It analyzes recent red/green sequences across pattern depths N = 1…7 and produces a unified probability score.
By understanding which side has statistically higher likelihood, traders can align their decision-making with dominant directional bias rather than emotion.

Methodology

Strict no-lookahead logic (no repaint, doji filtered out)

Hierarchical smoothing across depths (1 → 7) using empirical-frequency regularization

Optional exponential decay (EWMA) for adaptive weighting toward recent market behavior

Higher-timeframe EMA regime filter (trend-aligned / countertrend-blocked / off)

ALL / SELECTED scope modes with a single, consolidated decision per bar

On-chart informational tags showing raw frequency (“R”) and smoothed estimate (“E”)

Full alert support for directional probability shifts

How it helps day traders

The indicator highlights whether the next bar’s probability distribution favors the bullish or bearish side.
This supports decision-making that is aligned with:

recent statistical behavior,

trend direction,

and adaptive weighting of market conditions.

It is designed for traders who want a structured, probability-based confirmation rather than relying on subjective interpretation.

Research & Theory

This script is based on:

empirical pattern-frequency modeling,

hierarchical Bayesian-style smoothing,

and regime filtering through higher-timeframe trend structure.