Statistical Bias

The Statistical Bias indicator is a multi-asset directional engine that determines market bias by analyzing reversal and continuation candle patterns across a correlated triad of assets. It provides a systematic framework for identifying high-conviction directional narratives by requiring consensus across multiple instruments and timeframes.

Usage

The Usage section focuses on how the indicator aggregates data to form a directional bias. It can be used as a primary analysis tool to determine the "Draw on Liquidity" (DOL) and filter lower-timeframe entries.

Bias Detection Logic

The tool monitors two primary price action events per asset:

• Sweep and Reclaim: Occurs when the previous candle sweeps a prior high/low but closes back within the range, suggesting a rejection.
• Continuation Close: Occurs when the previous candle closes entirely beyond the prior candle's high or low, suggesting trend commitment.

Consensus Rules

Users can configure how the final "Triad Bias" is calculated through the following modes:

• Current Asset: Follows only the asset on the active chart.
• Majority: Requires 2 out of 3 assets to agree on the direction.
• All 3: Requires unanimous agreement across the triad, offering the highest conviction.

Multi-Timeframe Validation

The indicator allows for further filtering by requiring the selected Bias Timeframe (LTF) to align with the next higher timeframe (HTF). For example, a 15m bullish signal is only confirmed if the 1H timeframe is also bullish.

Details

The Statistical Bias automates the manual process of checking correlated assets (e.g., NQ, ES, and YM) to see if they are moving in tandem.

Accuracy Tracking When the Bias Timeframe matches the chart timeframe, the script tracks historical performance. A bullish bias is marked "correct" if the following candle makes a higher high, while a bearish bias is correct if it makes a lower low. This provides a real-time statistical hit rate for the current market conditions.

Draw on Liquidity (DOL) If the Bias Timeframe is higher than the chart timeframe, the script plots a horizontal DOL line. This line marks the high (for bullish bias) or low (for bearish bias) of the previous bias-period candle, representing the target price level the market is expected to gravitate toward.

Auto Triad System The script includes built-in logic to automatically select correlated assets based on the current chart:

• Indices: NQ, ES, YM.
• Forex: EURUSD, GBPUSD, DXY.
• Crypto: BTC, ETH, DXY.

Settings

Asset Selection

• Auto Triad: Automatically detects and loads correlated assets based on the current ticker.
• Manual Assets: Allows users to define custom tickers for Asset 1, 2, and 3.

Bias Timeframes

• Custom Bias TF: Enables a specific timeframe for candle analysis regardless of the current chart timeframe.

Bias Logic

• Asset Bias Validation: Choose between "LTF Only" or "LTF + HTF" for individual asset confirmation.
• Triad Bias Rule: Sets the consensus requirement (Current, Majority, or All 3).

Visual Output

• Bias Table Mode: Switch between "Full" (detailed grid) or "Compact" (minimalist status).
• Show DOL: Toggles the visibility of the Draw on Liquidity target line.

Styling

• Color Customization: Adjust colors for Bullish, Bearish, and Neutral states.
• DOL Styling: Customize the color and text of the liquidity target line.

FAQ

How do I interpret a "Neutral" status? A neutral status occurs when the individual asset's timeframes disagree (in LTF + HTF mode) or when the chosen consensus rule (Majority/All 3) is not met across the triad.

Does this indicator provide buy and sell signals? No, this is an analysis and narrative tool designed to determine directional bias and targets. It should be used to frame the market context before looking for entries on lower timeframes.

How do I access the Statistical Bias? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.