# Predictive Monte Carlo Engine Predictive Monte Carlo Engine is an indicator on [Vela](https://vela.luxalgo.com/chart), our next-generation charting platform, written in Pine Script®. Predictive Monte Carlo Engine simulates up to 200 future price paths using geometric Brownian motion, a simple random walk, or bootstrapped historical returns, optionally filtered to bars matching the current trend or momentum regime. Percentile-based projection zones and a dashboard that condenses the projection into one forecasted candle turn raw uncertainty into levels traders can plan around. - Indicator in the LuxAlgo Library, by LuxAlgo, published Apr 15, 2026. - Access: free. - Concepts: [Monte Carlo Price Paths](https://www.luxalgo.com/library/concept/monte-carlo-price-paths/) (primary), [Probability Cones](https://www.luxalgo.com/library/concept/probability-cones/) - Open on Vela: https://vela.luxalgo.com/chart?pineScriptCodeId=cmpwn4q41006lvhsg6f8m1rek - Page: https://www.luxalgo.com/library/indicator/predictive-monte-carlo-engine/ **Predictive Monte Carlo Engine** replaces the single forecast line with a distribution: up to 200 [Monte Carlo](https://www.luxalgo.com/library/concept/monte-carlo-price-paths/) price paths generated from historical drift and volatility, with support, resistance, and expectation read from where those paths travel. Three models drive the sampling: Geometric Brownian Motion, Simple Random Walk, and Historical Shuffle, a bootstrap of the market's actual past returns. ## How to Trade the Predictive Monte Carlo Engine? - **Max / Min and R1 / S1**: the projected range extremes plus the 90th and 10th percentile zones (profit-taking references, risk boundaries, and mean-reversion targets). - **Fading zones**: levels dim farther out because uncertainty grows with time, [probability cone](https://www.luxalgo.com/library/concept/probability-cones/) style. Weight near projections over far ones. - **Regime Filter**: builds the forecast only from bars whose trend (SMA-based) or momentum (RSI-based) state matches the present. - **Anchor Mode**: freeze a projection and let price trade into it, then review whether levels acted as magnets, pivots, or failure zones. - **Next Candle Prediction**: the dashboard's forecasted candle, which condenses the whole projection rather than the next bar: it opens at the current close, closes at the mean simulated end price after the Projection Length, and takes its high and low from the 90th and 10th percentile end prices. The point throughout is thinking in distributions, not single predictions: scenario planning for entries, targets, and stops. ## Predictive Monte Carlo Engine Settings - **Simulation Method**: GBM, Simple Random Walk, or Historical Shuffle. - **Regime Filter**: Trend or Momentum input filtering. - **Historical Lookback**: bars used to estimate drift and volatility. - **Projection Length / Simulation Count**: forecast horizon and number of generated paths (up to 200). - **Volatility Multiplier**: scales the volatility input for stress-test or calm scenarios. - **Anchor Mode**: refreshes the projection only after a set bar count. - **Path Percentiles, Show S/R Levels, Show Dashboard, Next Candle Prediction**: classification thresholds plus display toggles. ## Frequently Asked Questions ### Which simulation method should I pick? GBM offers the classic log-normal structure, Simple Random Walk the plainest additive one, and Historical Shuffle resamples your market's real returns, fat tails included, the bootstrap approach the [Monte Carlo Shuffled Projection](https://www.luxalgo.com/library/indicator/monte-carlo-shuffled-projection/) is built around. ### What does Anchor Mode actually change? Normally the projection refreshes every bar. Anchored, the start stays fixed until the chosen bar count elapses, so older forecasts stay visible for grading against what price actually did. ### How do I start using the Predictive Monte Carlo Engine? It's free on the LuxAlgo Library. Load it into Quant, our coding agent, directly from this page to explore lookbacks and horizons. You can also copy the source code from this page and run it anywhere Pine Script® runs. ## Related indicators - [Monte Carlo Shuffled Projection](https://www.luxalgo.com/library/indicator/monte-carlo-shuffled-projection/) (Monte Carlo Price Paths): markdown at https://www.luxalgo.com/library/indicator/monte-carlo-shuffled-projection.md - [Monte Carlo Mean Reversion Heatmap](https://www.luxalgo.com/library/indicator/monte-carlo-mean-reversion-heatmap/) (Monte Carlo Price Paths): markdown at https://www.luxalgo.com/library/indicator/monte-carlo-mean-reversion-heatmap.md - [Monte Carlo Expected Move Distribution](https://www.luxalgo.com/library/indicator/monte-carlo-expected-move-distribution/) (Monte Carlo Price Paths): markdown at https://www.luxalgo.com/library/indicator/monte-carlo-expected-move-distribution.md - [Anchored Monte Carlo Shuffled Projection](https://www.luxalgo.com/library/indicator/anchored-monte-carlo-shuffled-projection/) (Monte Carlo Price Paths): markdown at https://www.luxalgo.com/library/indicator/anchored-monte-carlo-shuffled-projection.md - [Probability Grid](https://www.luxalgo.com/library/indicator/probability-grid/) (Probability Cones): markdown at https://www.luxalgo.com/library/indicator/probability-grid.md - [3D Opportunity Cone](https://www.luxalgo.com/library/indicator/3d-opportunity-cone/) (Probability Cones): markdown at https://www.luxalgo.com/library/indicator/3d-opportunity-cone.md - [Spline Quantile Regression Channel](https://www.luxalgo.com/library/indicator/spline-quantile-regression-channel/) (Statistics): markdown at https://www.luxalgo.com/library/indicator/spline-quantile-regression-channel.md - [Precision Market Entropy Heatmap](https://www.luxalgo.com/library/indicator/precision-market-entropy-heatmap/) (Statistics): markdown at https://www.luxalgo.com/library/indicator/precision-market-entropy-heatmap.md --- Source: https://www.luxalgo.com/library/indicator/predictive-monte-carlo-engine/ (LuxAlgo Library). Free to use with attribution: https://www.luxalgo.com/library/license/