# Cause & Effect

Cause & Effect is an indicator on [Vela](https://vela.luxalgo.com/chart), our next-generation charting platform, written in Pine Script®.

Implements Wyckoff's law of cause and effect on a bar chart: trading ranges lasting 20+ bars inside a volatility-capped window are marked as the cause, and each breakout projects an objective zone by scaling the cause's size with the effect-to-cause ratios observed on that chart. Includes pending objectives, an effect path, six alerts, and a campaign dashboard.

- Indicator in the LuxAlgo Library, by LuxAlgo, published Jul 26, 2026.
- Access: free.
- Concepts: [Cause & Effect](https://www.luxalgo.com/library/concept/cause-and-effect/) (primary)
- Open on Vela: https://vela.luxalgo.com/chart?pineScriptCodeId=kcvx3a1i6eln7rogknlaxejo
- Page: https://www.luxalgo.com/library/indicator/cause-and-effect/

**Cause & Effect** puts Wyckoff's law of [cause and effect](https://www.luxalgo.com/library/concept/cause-and-effect/) on the chart as a working instrument. A consolidation of 20+ bars inside a volatility-capped window is marked as the cause; a close beyond the range tints the box with the breakout direction and projects an objective zone from the cause's size and the effect/cause ratios observed on the chart. Completed episodes feed the calibration, so projections are the chart's own measured tendency.

## How to Trade the Cause & Effect?

- **Neutral cause box**: preparation is building; dotted pending objectives creep away from both sides as it grows.
- **Upward or downward resolution**: markup or markdown begins; the shaded zone spans the interquartile band of realized ratios around the dotted median.
- **Effect label**: tracks the farthest excursion and its multiple of the cause; the dashboard's effect/risk row sizes it against a stop across the range.

Alerts cover cause formation, both breakouts, the zone reached or exceeded, and the episode's end.

## Cause & Effect Settings

- **Minimum Cause Duration (Bars)** (default 20): fewest bars inside the capped window to qualify.
- **Maximum Cause Height (xATR)** (default 3.5): range height cap, in volatility-baseline multiples.
- **Volatility Baseline Length** (default 200): ATR length behind the height cap.
- **Cause Size Measure** (default Duration x Height): duration x height, duration x ATR, or height alone.
- **Calibration Memory (Episodes)** (default 20): episodes used to estimate the proportionality.
- **Show Dashboard** (default enabled) with **Dashboard Position** (default Top Right).
- Style toggles (**Cause Ranges**, **Pending Objectives While Cause Builds**, **Objective Zone**, **Effect Path**, **Cause / Effect Labels**, **Keep Completed Episodes**) are on by default.

## Frequently Asked Questions

### How does this differ from point and figure cause counting?

The classical count measures a cause as the horizontal width of a point & figure range, which [Point & Figure Cause Counting](https://www.luxalgo.com/library/indicator/point-and-figure-cause-counting/) implements directly. This build approximates the count from bar-chart duration and width, then calibrates objectives from realized ratios.

### Why is there no objective zone at first?

The proportionality calibrates from completed cause-to-effect episodes, so the first cause on a fresh chart resolves without a projection. Zones appear after one completed episode and firm up as the memory fills.

### Should the objective zone be treated as a target?

It is a zone for planning, not a level: the proportionality is a tendency, not a rule. The Reached alert marks a rational area to scale out; the Exceeded alert flags effects outrunning what similar causes have funded.

## Related indicators

- [Effort vs Result](https://www.luxalgo.com/library/indicator/effort-vs-result/) (Wyckoff): markdown at https://www.luxalgo.com/library/indicator/effort-vs-result.md
- [Absorption](https://www.luxalgo.com/library/indicator/absorption/) (Wyckoff): markdown at https://www.luxalgo.com/library/indicator/absorption.md
- [Trading-range Position](https://www.luxalgo.com/library/indicator/trading-range-position/) (Wyckoff): markdown at https://www.luxalgo.com/library/indicator/trading-range-position.md
- [Wyckoff Method](https://www.luxalgo.com/library/indicator/wyckoff-method/) (Wyckoff): markdown at https://www.luxalgo.com/library/indicator/wyckoff-method.md
- [Spring](https://www.luxalgo.com/library/indicator/spring/) (Wyckoff): markdown at https://www.luxalgo.com/library/indicator/spring.md
- [Wyckoff Accumulation Schematic](https://www.luxalgo.com/library/indicator/wyckoff-accumulation-schematic/) (Wyckoff): markdown at https://www.luxalgo.com/library/indicator/wyckoff-accumulation-schematic.md
- [Upthrust After Distribution](https://www.luxalgo.com/library/indicator/upthrust-after-distribution/) (Wyckoff): markdown at https://www.luxalgo.com/library/indicator/upthrust-after-distribution.md
- [Wyckoff Wave & Volume Studies](https://www.luxalgo.com/library/indicator/wyckoff-wave-and-volume-studies/) (Wyckoff): markdown at https://www.luxalgo.com/library/indicator/wyckoff-wave-and-volume-studies.md

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Source: https://www.luxalgo.com/library/indicator/cause-and-effect/ (LuxAlgo Library). Free to use with attribution: https://www.luxalgo.com/library/license/