5‑Factor Market Bias For ThinkOrSwim

[jonshank62]

mod note:
This indicator reads the market’s bias and tells you whether the current bar is neutral, bullish, or bearish.
It converts five different pressures into a single weighted score, colors the line and the price bars based on that score, and prints a label that tells you the current state.

---

I have come up with this bar-by-bar grading system with a lag time of 1 bar.
I have added different colors for different grades.

The lower study is choppy and hard to follow but does accurately display the choppiness of the market .

I have also added a label and color bar options.
I'm not usually a fan of color bars, but wow, for me, it is an eye-opener. It makes it easy to distinguish institutional bars from the common noise.

Also, yellow = natural is very interesting.
So far, every time a yellow is posted, the price, if not interfered with, will revert to the 20 PMA.

This is the code I am using with good success on all time frames

# WEIGHTED ENSEMBLE SYSTEM
# 5‑Factor Market Bias Model
# bar by bar analysis

declare lower;
# These defaults reflect real-world behavioral importance:
# 200 Sma >9 sma > rsi 4 > Obv > Break out >

input w1 = 4.0; # Weight for 200 Sma
input w2 = 4.0; # Weight for 9 SMA
input w3 = 4.0; # Weight for rsi (4)
input w4 = 4.0; # Weight for OBV direction
input w5 = 8.0; # Weight for Breakout Range

def score1 =
if close > Average(close, 200) then 0.5 else -0.5;

def score2 =
if Average(close, 8) > Average(close, 9)[1] then 0.5 else -0.5;

def score3 =
if rsi(4) > rsi(4)[1] then 0.5 else -0.5;

def score4 =
if OnBalanceVolume() > OnBalanceVolume()[1] then 0.5 else -0.5;

def score5 =
if close > Highest(high, 5)[1] then 0.5 else
if close < Lowest(low, 5)[1] then -0.5 else 0;

def finalScore =
score1 * w1
+ score2 * w2
+ score3 * w3
+ score4 * w4
+ score5 * w5;

plot ZeroLine = 0;
ZeroLine.SetDefaultColor(Color.GRAY);
ZeroLine.SetLineWeight (4);

plot pLine = 4.0;
pLine.SetDefaultColor(Color.GREEN);
pLine.SetLineWeight (3);

plot nLine = -4.0;
nLine.SetDefaultColor(Color.RED);
nLine.SetLineWeight (3);

plot Score = finalScore;
Score.SetLineWeight(3);
Score.SetPaintingStrategy(PaintingStrategy.LINE);

Score.AssignValueColor(
if finalScore > -2 and finalScore < 2 then Color.YELLOW else
if finalScore > 2.1 and finalScore <= 4 then Color.LIME else
if finalScore > 4.1 and finalScore <= 8 then Color .GREEN else
if finalScore > 8.1 then Color.DARK_GREEN else
if finalScore < -2.1 and finalScore >= -4 then Color.PINK else
if finalScore < -4.1 and finalScore >= -8 then Color.RED else
if finalScore < -8.1 then Color.DARK_RED else Color.GRAY);


input colorbars = yes;
AssignPriceColor(if !colorbars then Color.CURRENT else
if finalScore > -2 and finalScore < 2 then Color.YELLOW else
if finalScore > 2.1 and finalScore <= 4 then Color.LIME else
if finalScore > 4.1 and finalScore <= 8 then Color .GREEN else
if finalScore > 8.1 then Color.DARK_GREEN else
if finalScore < -2.1 and finalScore >= -4 then Color.PINK else
if finalScore < -4.1 and finalScore >= -8 then Color.RED else
if finalScore < -8.1 then Color.DARK_RED else
Color.GRAY );



# note if yellow printed then nutural and price will attempt to revert to movingAverage

input showLabel = yes ;
AddLabel(showLabel ,

if finalScore > -2 and finalScore < 2 then "neutral" else
if finalScore > 2.1 and finalScore <= 4 then "neutral +" else
if finalScore > 4.1 and finalScore <= 8 then "bull" else
if finalScore > 8.1 then "strong bull" else
if finalScore < -2.1 and finalScore >= -4 then "neutral -" else
if finalScore < -4.1 and finalScore >= -8 then "bear" else
if finalScore < -8.1 then "strong bear" else "unknown",

if finalScore > -2 and finalScore < 2 then Color.YELLOW else
if finalScore > 2.1 and finalScore <= 4 then Color.LIME else
if finalScore > 4.1 and finalScore <= 8 then Color.GREEN else
if finalScore > 8.1 then Color.DARK_GREEN else
if finalScore < -2.1 and finalScore >= -4 then Color.PINK else
if finalScore < -4.1 and finalScore >= -8 then Color.RED else
if finalScore < -8.1 then Color.DARK_RED else Color.GRAY , Location.top_right
, FontSize.LARGE);

 

[mc01439]

I turned your wonderful indicator into the following -

7‑Factor Probability Ensemble​

✔ Directional Confidence (high = bullish, low = bearish)​

✔ Symmetric Bull/Bear Action Engine​

✔ Probability Line Color‑Matched to Action States​

✔ Sentiment Label (original style) ← added as requested​

✔ Confidence Label​

✔ Action Suggestion Label​

indicator is now:​

✔ A 7‑factor ensemble​

✔ A directional confidence engine​

✔ A symmetric bull/bear decision model​

✔ A color‑coded visual system​

✔ A trading assistant that tells you:​

How to Use the 7‑Factor Probability Ensemble Indicator​

This indicator blends seven independent market factors into a single probability score, a directional confidence score, and a color‑coded action engine. It tells you trend direction, trend strength, and what action to take — long or short.

It is designed to be simple to read and extremely powerful in practice.

1. Probability (Direction of Bias)​

The main line (0–100%) represents the bullish probability of the market based on:

• Trend (200 SMA)
• Momentum (8/9 SMA)
• RSI(4)
• OBV
• Breakout/Breakdown behavior
• Trend stability (ADX)
• Volatility regime (ATR/price)

Interpretation:​

• > 70% → Bullish environment
• 45–55% → Neutral / compression
• < 30% → Bearish environment

This is your directional bias.

2. Confidence (Strength of Agreement)​

Confidence measures how many of the 7 factors agree with the current direction.

• High confidence (> 70%) → strong bullish agreement
• Low confidence (< 30%) → strong bearish agreement

This is your conviction gauge.

3. Sentiment Label (Original Style)​

This label gives a simple, intuitive readout:

• Strong Bull
• Bull
• Neutral +
• Neutral
• Neutral –
• Bear
• Strong Bear

It’s a quick summary of the probability curve.

4. Action Suggestion Label (Your Decision Engine)​

This is the heart of the system. It combines probability + confidence to tell you exactly what to do.

✔ Press Long​

Condition:

• Probability > 70%
• Confidence > 70%

Meaning: Strong bull trend. Internals aligned. Best long entries.

✔ Press Short​

Condition:

• Probability < 30%
• Confidence < 30%

Meaning: Strong bear trend. Internals aligned. Best short entries.

✔ Avoid Longs​

Condition:

• Probability > 70%
• Confidence < 40%

Meaning: Bullish fake out risk. Price is pushing up but internals disagree.

✔ Avoid Shorts​

Condition:

• Probability < 30%
• Confidence > 60%

Meaning: Bearish fake out risk. Price is dropping but internals disagree.

✔ Prepare Long (Bullish Compression)​

Condition:

• Probability 45–55%
• Confidence > 70%

Meaning: Market is coiling. Bullish breakout likely.

✔ Prepare Short (Bearish Compression)​

Condition:

• Probability 45–55%
• Confidence < 30%

Meaning: Market is coiling. Bearish breakout likely.

✔ Wait​

Condition: Everything else.

Meaning: No edge. Stay patient.

5. Color‑Coded Probability Line​

The probability line changes color to match the action state:

• Dark Green → Press Long
• Dark Red → Press Short
• Orange → Avoid Longs
• Magenta → Avoid Shorts
• Cyan → Prepare Long
• Light Red → Prepare Short
• Gray → Wait

This gives you a visual read of the market state without even looking at the labels.

How to Trade With It (Simple Rules)​

Long Setup​

• Look for Dark Green or Cyan
• Enter on pullbacks or breakouts
• Avoid longs when line is Orange

Short Setup​

• Look for Dark Red or Light Red
• Enter on breakdowns or failed rallies
• Avoid shorts when line is Magenta

When in Doubt​

• If the line is Gray, sit out.
• Mixed conditions = no edge.

What Makes This Indicator Special​

It’s not a single signal. It’s not a moving average crossover. It’s not a momentum oscillator.

It’s a multi‑factor ensemble model — the same type of logic used in institutional quant systems.

It gives you:

• Direction
• Conviction
• Sentiment
• Action
• Visual confirmation

All in one place.

• When to press long
• When to press short
• When to avoid
• When to prepare
• When to wait
  

  declare lower;
  
  # -------------------------
  # Weights for each factor
  # -------------------------
  input w1 = 4.0;  # 200 SMA trend
  input w2 = 4.0;  # 8/9 SMA momentum
  input w3 = 4.0;  # RSI(4) momentum
  input w4 = 4.0;  # OBV direction
  input w5 = 8.0;  # Breakout / breakdown
  input w6 = 6.0;  # Trend stability (ADX)
  input w7 = 3.0;  # Volatility regime (ATR/price)
  
  # -------------------------
  # Core series
  # -------------------------
  def sma200 = Average(close, 200);
  def sma8   = Average(close, 8);
  def sma9   = Average(close, 9);
  def rsi4   = RSI(4);
  def obv    = OnBalanceVolume();
  def adx14  = ADX(14);
  def atr14  = ATR(14);
  
  # -------------------------
  # Factor probabilities (0–1)
  # -------------------------
  
  # 1) 200 SMA trend
  def p1 = if close > sma200 then 0.75 else 0.25;
  
  # 2) Short-term SMA momentum
  def p2 = if sma8 > sma9[1] then 0.70 else 0.30;
  
  # 3) RSI(4) momentum
  def p3 = if rsi4 > rsi4[1] then 0.65 else 0.35;
  
  # 4) OBV direction
  def p4 = if obv > obv[1] then 0.60 else 0.40;
  
  # 5) Breakout / breakdown
  def p5 =
      if close > Highest(high, 5)[1] then 0.80
      else if close < Lowest(low, 5)[1] then 0.20
      else 0.50;
  
  # 6) Trend stability (ADX normalized)
  def p6 = Min(Max(adx14 / 50, 0), 1);
  
  # 7) Volatility regime (ATR/price)
  def vol = atr14 / close;
  def p7 = if vol > vol[1] then 0.60 else 0.40;
  
  # -------------------------
  # Weighted ensemble probability
  # -------------------------
  def totalWeight = w1 + w2 + w3 + w4 + w5 + w6 + w7;
  
  def weightedProb =
      (p1*w1 + p2*w2 + p3*w3 + p4*w4 + p5*w5 + p6*w6 + p7*w7) /
      totalWeight;
  
  # Soft logistic transform
  def bullProb = 1 / (1 + Exp(-(weightedProb - 0.5) * 8));
  
  plot Probability = bullProb * 100;
  Probability.SetLineWeight(3);
  
  # -------------------------
  # Confidence Score (0–100%)
  # -------------------------
  def bullCount =
      (p1 > 0.50) +
      (p2 > 0.50) +
      (p3 > 0.50) +
      (p4 > 0.50) +
      (p5 > 0.50) +
      (p6 > 0.50) +
      (p7 > 0.50);
  
  def confidence = bullCount / 7;
  
  AddLabel(
      yes,
      "Confidence: " + AsPercent(confidence),
      if confidence > 0.80 then Color.GREEN
      else if confidence > 0.60 then Color.LIME
      else if confidence > 0.40 then Color.YELLOW
      else if confidence > 0.20 then Color.PINK
      else Color.RED
  );
  
  # -------------------------
  # Sentiment Label (Original Style)
  # -------------------------
  def sentiment =
      if bullProb > 0.85 then 3 else
      if bullProb > 0.70 then 2 else
      if bullProb > 0.55 then 1 else
      if bullProb >= 0.45 then 0 else
      if bullProb >= 0.30 then -1 else
      if bullProb >= 0.15 then -2 else -3;
  
  AddLabel(
      yes,
      if sentiment == 3 then "Strong Bull (" + AsPercent(bullProb) + ")"
      else if sentiment == 2 then "Bull (" + AsPercent(bullProb) + ")"
      else if sentiment == 1 then "Neutral + (" + AsPercent(bullProb) + ")"
      else if sentiment == 0 then "Neutral (" + AsPercent(bullProb) + ")"
      else if sentiment == -1 then "Neutral - (" + AsPercent(bullProb) + ")"
      else if sentiment == -2 then "Bear (" + AsPercent(bullProb) + ")"
      else "Strong Bear (" + AsPercent(bullProb) + ")",
  
      if sentiment == 3 then Color.DARK_GREEN
      else if sentiment == 2 then Color.GREEN
      else if sentiment == 1 then Color.LIME
      else if sentiment == 0 then Color.YELLOW
      else if sentiment == -1 then Color.PINK
      else if sentiment == -2 then Color.RED
      else Color.DARK_RED
  );
  
  # -------------------------
  # Symmetric Bull + Bear Action Suggestion Label
  # -------------------------
  
  AddLabel(
      yes,
  
      if bullProb > 0.70 and confidence > 0.70 then
          "Press Long: Strong Bull Trend (High Prob + High Conf)"
  
      else if bullProb < 0.30 and confidence < 0.30 then
          "Press Short: Strong Bear Trend (Low Prob + Low Conf)"
  
      else if bullProb > 0.70 and confidence < 0.40 then
          "Avoid Longs: Bull Fakeout Risk (High Prob + Low Conf)"
  
      else if bullProb < 0.30 and confidence > 0.60 then
          "Avoid Shorts: Bear Fakeout Risk (Low Prob + High Conf)"
  
      else if bullProb >= 0.45 and bullProb <= 0.55 and confidence > 0.70 then
          "Prepare Long: Bullish Compression (Neutral Prob + High Conf)"
  
      else if bullProb >= 0.45 and bullProb <= 0.55 and confidence < 0.30 then
          "Prepare Short: Bearish Compression (Neutral Prob + Low Conf)"
  
      else
          "Wait: Mixed Conditions",
  
      if bullProb > 0.70 and confidence > 0.70 then Color.DARK_GREEN
      else if bullProb < 0.30 and confidence < 0.30 then Color.DARK_RED
      else if bullProb > 0.70 and confidence < 0.40 then Color.ORANGE
      else if bullProb < 0.30 and confidence > 0.60 then Color.MAGENTA
      else if bullProb >= 0.45 and bullProb <= 0.55 and confidence > 0.70 then Color.CYAN
      else if bullProb >= 0.45 and bullProb <= 0.55 and confidence < 0.30 then Color.LIGHT_RED
      else Color.GRAY
  );
  
  # -------------------------
  # Probability Line Color Matching Action States
  # -------------------------
  
  Probability.AssignValueColor(
      if bullProb > 0.70 and confidence > 0.70 then Color.DARK_GREEN
      else if bullProb < 0.30 and confidence < 0.30 then Color.DARK_RED
      else if bullProb > 0.70 and confidence < 0.40 then Color.ORANGE
      else if bullProb < 0.30 and confidence > 0.60 then Color.MAGENTA
      else if bullProb >= 0.45 and bullProb <= 0.55 and confidence > 0.70 then Color.CYAN
      else if bullProb >= 0.45 and bullProb <= 0.55 and confidence < 0.30 then Color.LIGHT_RED
      else Color.GRAY
  );