# Dynamic Time Warping Similarity Dynamic Time Warping Similarity is an indicator on [Vela](https://vela.luxalgo.com/chart), our next-generation charting platform, written in Pine Script®. Searches history for the windows whose shape most resembles the last 30 bars, comparing z-normalized windows with dynamic time warping under a Sakoe-Chiba band. The closest non-overlapping analogs are boxed on the chart with optional aftermath zones showing what followed, ranked in a dashboard by DTW distance, with alerts when the best match crosses the strong-match threshold. - Indicator in the LuxAlgo Library, by LuxAlgo, published Jul 22, 2026. - Access: free. - Concepts: [Dynamic Time Warping Similarity](https://www.luxalgo.com/library/concept/dynamic-time-warping-similarity/) (primary) - Open on Vela: https://vela.luxalgo.com/chart?pineScriptCodeId=gxlrcjyjgas4otxyq8ym6jb4 - Page: https://www.luxalgo.com/library/indicator/dynamic-time-warping-similarity/ **Dynamic Time Warping Similarity** retrieves the historical price windows that most resemble the current one, using [dynamic time warping](https://www.luxalgo.com/library/concept/dynamic-time-warping-similarity/) so shapes that unfolded at different speeds can still match. It is the technique's first Library implementation. Every window is z-normalized, making the search about shape rather than price level, and the warping path is constrained to a Sakoe-Chiba band to keep alignments honest. ## How to Trade the Dynamic Time Warping Similarity? - **Analog boxes**: the closest non-overlapping windows are boxed on the chart, colored from closest to farthest; labels report rank and DTW distance. - **Aftermath zones**: dashed extensions show what happened after each analog, a study aid, explicitly not a forecast. - **Strong match alerts**: fire when the best distance drops to or below the threshold, and when no analog remains that close. - **Dashboard**: ranks the analogs by distance with their age in bars. As elsewhere in the [machine learning family](https://www.luxalgo.com/library/family/machine-learning/), treat the output as evidence: a low distance says two shapes rhyme, nothing more. ## Dynamic Time Warping Similarity Settings - **Source** (default close) and **Window Length** (default 30): the series and bars per window; the latest bars form the reference. - **Search Lookback** (default 1000): historical bars scanned. - **Scan Stride** (default 2): step between candidates; grows automatically to respect the computation budget. - **Warping Band Width** (default 5): the Sakoe-Chiba constraint; 0 disables warping. - **Analogs To Retrieve** (default 3): non-overlapping matches kept and ranked. - **Strong Match Threshold** (default 3): the distance at or below which a match counts as strong. - **Aftermath Zone** (default enabled) with **Length** (default 15): the highlighted bars after each analog. - **Dashboard and style toggles**: panel position and size, labels, and colors. ## Frequently Asked Questions ### How is this different from a correlation measure? The [Correlation Coefficient](https://www.luxalgo.com/library/indicator/correlation-coefficient/) compares two aligned series bar for bar, so identical shapes at different tempos score poorly. DTW searches over time alignments before measuring distance: what pattern retrieval at unknown tempo requires. ### Are the aftermath zones predictions? No. They expose what followed each similar shape so the range of outcomes can be studied. Contradictory aftermaths are themselves information: the shape has no consistent historical resolution. ### Why did the scan skip some candidate windows? The scan is budgeted: when lookback, window length and band width would exceed it, the stride increases automatically. A shorter window or lookback restores a denser scan. ## Related indicators - [KNN Supertrend Horizon](https://www.luxalgo.com/library/indicator/knn-supertrend-horizon/) (kNN Analog Forecasting): markdown at https://www.luxalgo.com/library/indicator/knn-supertrend-horizon.md - [kNN Market Architecture](https://www.luxalgo.com/library/indicator/knn-market-architecture/) (kNN Analog Forecasting): markdown at https://www.luxalgo.com/library/indicator/knn-market-architecture.md - [The Echo Forecast](https://www.luxalgo.com/library/indicator/the-echo-forecast/) (kNN Analog Forecasting): markdown at https://www.luxalgo.com/library/indicator/the-echo-forecast.md - [Indicator Configuration Forecasting](https://www.luxalgo.com/library/indicator/indicator-configuration-forecasting/) (kNN Analog Forecasting): markdown at https://www.luxalgo.com/library/indicator/indicator-configuration-forecasting.md - [MACD Based Price Forecasting](https://www.luxalgo.com/library/indicator/macd-based-price-forecasting/) (kNN Analog Forecasting): markdown at https://www.luxalgo.com/library/indicator/macd-based-price-forecasting.md - [Neighboring Trailing Stop](https://www.luxalgo.com/library/indicator/neighboring-trailing-stop/) (kNN Analog Forecasting): markdown at https://www.luxalgo.com/library/indicator/neighboring-trailing-stop.md - [Historical Price Projection](https://www.luxalgo.com/library/indicator/historical-price-projection/) (kNN Analog Forecasting): markdown at https://www.luxalgo.com/library/indicator/historical-price-projection.md - [Matrix Profile](https://www.luxalgo.com/library/indicator/matrix-profile/) (Machine Learning): markdown at https://www.luxalgo.com/library/indicator/matrix-profile.md --- Source: https://www.luxalgo.com/library/indicator/dynamic-time-warping-similarity/ (LuxAlgo Library). Free to use with attribution: https://www.luxalgo.com/library/license/