Anchored Monte Carlo Shuffled Projection

The Anchored Monte Carlo Shuffled Projection tool is a powerful trading indicator that simulates future price movements by anchoring historical data to a specific point in time. This technical indicator provides traders with a clearer understanding of potential future price action, utilizing randomized simulations based on past bar movements to identify possible trends and support or resistance levels.

How to Trade the Anchored Monte Carlo Shuffled Projection Tool?

To begin using the Anchored Monte Carlo Shuffled Projection tool, apply the indicator to your chart. You will need to set an anchor point by clicking on your desired location on the chart. Note that the anchor point is determined solely by time, enhancing the precision of your analysis.

Note: To set a new anchor point, utilize the 'More' dropdown (○○○) next to the indicator status bar and select "Reset points..." Alternatively, click and drag the vertical line displayed on the anchor point bar when the indicator is highlighted.

By generating random bar movement simulations, this indicator creates a range of potential price actions. These can be instrumental in identifying future price development and establishing potential support or resistance levels. Numerous simulations lead to an "Average Line," highlighting where prices might trend, assuming existing trends and volatility conditions continue.

Current closing price + Sum of changes in the calculation window

This equation indicates that simulations will always extend to an endpoint consistent with the slope of the current lookback period. Nevertheless, for traders seeking a less biased range, a relevant option is available:

Under the Hood: The Anchored Monte Carlo Shuffled Projection Process

The tool constructs simulations from prices within a user-defined lookback window beginning at the anchor point. Here's how it works:

• Gather each bar's price changes in the user-defined window.
• Shuffle the order of each price change.
• Project the shuffled changes' cumulative sum from the current closing price.
• Log data for each simulation step.

With the 'Randomize Direction' feature, for the 'Randomize Direction' calculation, each alternate change's value is inverted, generating diverse endpoints for each simulation. This tool can record up to 1000 simulations, and the 'Visualize Simulations' option allows you to view up to 99 of these simulations for in-depth analysis.

With complete simulation data available, traders can assess various metrics such as standard deviations, which are visualized as the average of all standard deviations across vertical data groups, thus offering a single distinctive value displayed along the simulation center line.

Fine-Tuning Your Settings

• Lookback: Define how many bars to include in calculations.
• Simulation Count: Configure the number of randomized simulations (up to 1000).
• Randomize Direction: Refine the distribution for a more 'Normalized' simulation outcome.
• Visualize Simulations: Activate visualization, with randomly generated colors; displays up to 99 simulations despite calculations for 1000.

Understanding Standard Deviations

• Standard Deviation Multiplier: Adjusts the multiplier affecting the standard deviation's distance from the center line.

Enhance Your Style

• Extend Lines: Forward project simulated value lines for advanced analysis and reference.

FAQ

How can I access the Anchored Monte Carlo Shuffled Projection tool?

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

What does the 'Randomize Direction' setting accomplish?

This setting enhances the distribution, allowing for a more balanced simulation by altering the direction of every alternate change.